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INDSEC

BroadIndicators Sensex 19348.34 Nifty 5755.05 Rs./$ 60.48 +1.44 NYMEXCrude($/bbl)* 103.43 +0.35 CallRate 10.00 10YearGSec 8.24 Technicals Sensex Spot Support1 Support2 Resistance1 Resistance2 Nifty Spot Support1 Support2 Resistance1 Resistance2 5755 5739 5701 5777 5815 19348 19294 19166 19422 19550 76.05 244.94

Wednesday
CorporateNews:

NEWS HIGHLIGHTS

July 31, 2013

Russian potash producer Uralkali has decided to pull out of its sales partnership with Belarus. The two groups in a global cartel command twothirds of a nearly $22bn market for Potash whichisthefertilizeringredient.Thetwoentitieshadbeenpartnersforeightyears,ridingalong and profitable wave in which potash prices surged to close to $900 a ton just four years ago, beforesinkingtoaround$400thisyear.The move is expected to bring down potash prices by 25% to about $300 a metric ton by the end of year. The aim would be to increase market share, sending prices even lower. However, the prospect of cheaper fertilizer would help do mesticfertilizermanufacturesinIndiaastheyimportalmosttheentirerequirement. Hindalco has managed to refinance Rs. 47bn from SBI and Axis Bank for its Utkal alumina pro ject. At an interest rate of 10.15% payable over an 8yr period, this will imply a reduction of a whopping 300 basis points from the previous loan. Scheduled to be commissioned in the H2FY14, Utkal is a 1.5 mn ton refinery that will feed the companys Mahan and Aditya smelters inMPandOrissa,respectively.ThetotalprojectcostisRs.70bn,70%ofwhichhasbeenfunded throughdebt.TheprojectdebtofRs.49bnwastiedup3yrsyearsagofromaconsortiumof28 PSU Banks, including SBI, PNB, BOB and Canara Bank. Interestingly, the banks had agreed to allow Hindalco to draw down the amount over a 3yr period during the construction of the plant without any commitment fees. The company also retained the right to prepay the facil ity,withoutanypenalty,everyyear. The Delhi High Court, in two separate cases, has asked the govt not to take coercive measures against Sun Pharma and Cipla till the next hearing. The HC has also ordered the two companies tofurnishpricelistsofessentialdrugstheymanufactureasmandatedunderthenewDrugPrice Control Order (DPCO) to domestic drug distributors and state drug controllers. The two compa nieshadchallengedthegovtonthespecificprovisionunderthedrugpricecontrolorder2013, which mandated thepharmacompanies toensure that their essentialdrugs should sport new pricelabelswithinaperiodof45daysfromthedateofDPCO.Sincethecourthasnotspeltout explicitly that drug retailers would have to sell at new prices notified under DPCO 2013, com panies are interpreting it as a temporary relief till the matter is finally decided or the court takesadifferentview. As per media reports, the govt has halved to 5% the stake it plans to sell in Coal India, following an agreement with unions. The govts original plan was to sell 10% stake in Coal India to raise Rs.200bn,buttheproposalhadmetwithstiffresistancefromtradeunionswhothreatenedto goonstrike.Afterconsultationswithunions,thegovernmenthasnowdecidedtosellonly5% throughopenmarket,withtheremainingthroughotheroptionslikesharebuyback. NTPC Ltd has posted a marginal 1.1% growth in net profit for the quarter ended June. The com panyrecordedanetprofitofRs.25bnagainstRs.24bnintheyearagoperiodonlowerexpenses at Rs122bn during the quarter. Fuel cost, which accounts for a bulk of the expenditure, came down11%toRs.94bn.Totalincomeofthecompanydeclined2.8%toRs.163bnduringthequar teragainstRs.168bninthesamequarterlastfinancialyear.Incomefrompowersalesdipped2.1 percenttoRs.156bn.

GlobalMarkets Nikkei 13755.30 Kospi 1914.76 2.29 HangSeng 22004.20 +50.25 6570.95 15520.60 Nasdaq 3616.47 +17.33 *Bloomberg8.00am FTSE100 +10.70 1.38 114.56

Economy:

RBI in its latest monetary policy has maintained the status quo on repo rate and cash reserve ratio ( CRR) leaving those unchanged at 7.25% and 4%, respectively. However, its unexpect edly dovish tone led to the rupees slide to 60.49 a dollar below the psychological 60 a dollar level for the first time since July 9. The central banks liquidity tightening measures had been able to halt the currencys depreciation over the past two weeks. On Tuesday, RBI kept its March end inflation forecast unchanged at 5%, while it lowered its estimate for FY14 economic growthto5.5%,from5.7%projectedinMay.(Sourceofallnewsfromleadingdailies)

DowJones

EconomicCalendar: Country US US US Euro Euro Nifty Event GDPAnnualizedQoQ PersonalConsumption FOMCRateDecision UnemploymentRate CPICoreYoY Month 2QA 2QA Jul13 Jun JulA Survey 0.01 0.016 0.0025 0.122 0.012 Actual Prior 0.018 0.026 0.0025 0.121 0.012

Sensex TopLosers BPCL 310.10 8.90% RelInfra 336.60 7.09% DLF 157.20 7.09% Ranbaxy 279.10 6.44% ONGC 280.00 5.91% TopGainers Wipro 419.75 +2.75% JindalSteel 202.25 +1.45% Infosys 2955.70 +1.20% L&T 849.55 +0.97% SunPharma 574.75 +0.92% TopLosers ONGC 280.85 5.64% Hindalco 86.40 4.64% TataMotors 284.40 3.94% BhartiAirtel 321.45 3.76% BajajAuto 1927.90 3.40%

TopGainers IDFC 113.40 +2.53% JindalSteel 203.50 +1.95% HCLTech 911.00 +1.58% SunPharma 577.00 +1.36% L&T 850.00 +1.05%

INDSEC RESEARCH
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JULY 31, 2013

INDSEC
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