Benchmark indices trade in a tight range with positive bias

The benchmark equity indices are trading in a tight range with positive bias in late morning session. Meanwhile on global front all the regional peers are trading in the positive terrain and the Dow futures too was trading in the green in screen trade at this point of time. Back home, on Dalal Street, the Sensex was trading firm above 20,500 marks and the Nifty was inching up towards 6,200 levels. In the sectoral space of the BSE, Metal, Consumer Durables (CD), Auto, Reality and Bankex, while on the other hand IT counters were witnessing some selling pressure. However the broader market is outperforming the frontline counters and the market breadth on the BSE is extremely good; there were 2051 shares on the gaining side against 642 shares on the losing side, while 86 shares were unchanged. The S&P CNX Nifty may face resistance around 6180 and 6242 levels whereas support will be around 6148 and 6080 mark for the day.

The BSE Sensex increased 86.12 points or 0.42% at 20,535.11. The index touched a high and a low of 20,664 and 20,567.16, respectively.

The BSE Mid-cap and Small-cap indices rose 1% and 1.44%, respectively.

The main gainers in the BSE sectoral space were Metal up 1.91%, Consumer Durables (CD) up 1.08% Auto up 0.85% Reality up 0.82% and Bankex up 0.74%.

On the other hand,   Information Technology (IT) down 0.03% was the only loser in the BSE sectoral space.

The major gainers on the Sensex were Tata Steel up 2.88%, Sterlite  Indutries up 2.47%, M&M up 1.99%, JP Associates up 1.89% and  RCom was up by 4.63%.

On the flip side, NTPC down 0.87%, BHEL down 0.47%, Bharti Airtel down 0.38%,Cipla down 0.38% and HUL down 0.21% were the major losers in the BSE sectoral space

The Indian government is unlikely to extend a notification which brought down the import duty on sugar to zero percent as the domestic production outlook strengthens. The notification that was valid till Friday last week has been allowed to lapse which in effect has restored the 60% import duty on the sweetener.

The government had abolished that import duty on sugar in early 2009 to boost domestic supply as there was a shortfall in output in two consecutive years in 2008-09 and 2009-10. However, in the current season, the production is likely to revive again and reach around 24.5 million tonne against India's domestic consumption of 23 million tonne, thus leaving something for export. 

Over the last year, the country imported about 6 million tonne of sugar to meet domestic demand. Sugar production in the country, the second largest producer in the world, had declined to 14.7 million tonne in 2008-09. While it was expected that production will revive in 2009-10 season, a poor monsoon in 2009 severely impacted the crop and production remained below 20 million tonne and the country remained a net imported till recently. 

Now, however, the production outlook is clearer. After the late rains this season, it was apprehended by some analysts that production may go down compared with earlier estimates. The government however seems to be quite convinced of its production estimates. According to farm ministry officials, sugar production forecast remains at 24.5 million tonne as the recent rain might not adversely impact output. Also, the farm ministry expects that if there is some marginal downside in production, the same may be compensated by higher recovery.

The S&P CNX Nifty surged 26.30 points or 0.43% to 6160.80. The index touched a high and a low of 6,178.55 and 6,152.30, respectively.

The top gainers on the Nifty were Tata Steel up 2.73%,Sesa Goa up 2.43%, Sterlite up 2.38%, SAIL up 2.08% and Jaiprakash Associates was up 1.94%.

The top losers on the index were  NTPC down 0.97%, Cipla down 0.50%, HCL Tech 0.50%, BHEL 0.49%, HUL down 0.45%.

All regional peers were trading in the green; Hang Seng increased  by 1.38%, Jakarta Composite advanced 0.76%, KLSE Composite rise by 0.76%, Straits Times inched 1.18%, Seoul Composite surged and Taiwan Weighted moved up by 0.52%.

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