Equity markets cut losses in mid morning trade

Indian equity markets after continuing Friday's weak trend in early trade have now trimmed their losses in mid morning session on emergence of buying at select counters and covering-up of pending short positions by speculators ahead of monthly expiry in the derivatives segment on Thursday which mainly influenced the trading sentiment. However, the broad-based National Stock Exchange Nifty still was in the red zone as the ongoing probe into the 2G spectrum scam and a weak trend on other Asian bourses capped its gains. On the global front, despite positive closing of the Wall Street on Friday, the Asian shares were trading lower as a fresh round of policy tightening from China and spreading unrest in the Middle East encouraged some profit-taking after last week's solid gains. Back home, stocks from Capital Goods, Oil & Gas and Consumer Durables counters were trading confidently, while losses from stocks from Auto, Realty and Bankex space limited the upmove of the market. Meanwhile, the broader space also depicted some weak spells.  However, the gains of frontliners like, Wipro which rose 2.13% after ratings upgrade by brokerage firm CLSA, followed by Sterlite, Reliance Infra and Jindal Steel also contributed to the recovery of the market. The market breadth on BSE though narrowed but still remain in the favour of declines which were outnumbering advances in the ratio of 1277:973, while, 102 shares remained unchanged.

The BSE Sensex is currently trading at 18,235.64, up by 24.12 points or 0.13%. The index has touched a high of 18,306.75 and a low of 18,133.00 respectively. There were 13 stocks advancing against 17 declines on the index.

The broader indices too were trading in the red; the BSE Mid cap and Small cap indices were down by 0.35% and 0.23% respectively.

The top gaining sectoral indices on the BSE were, Capital Goods (CG) up by 1.04%, Oil & Gas up by 0.82%, Consumer Durables (CD) up by 0.67%, Metal up by 0.58% and FMCG up by 0.50 %, While, Auto down by 1.31%, Realty down by 0.88%, Bankex down by 0.36%, Healthcare down 0.33% and TECk down by 0.08% were the major losers on the index.

The top gainers on the Sensex were Wipro up by 2.90%, Sterlite Industries up by 2.28%, Jindal Steel up by 2.19%, BHEL up by 1.64% and L&T was up by 1.62%.

Tata Power down 2.17%, Hero Honda down by 2.16%, Tata Motors down by 2.12%, DLF down by 2.02% and M&M down by 1.27% were the top losers on the index were.

Meanwhile, the Indian government is likely to clear export of 5 lakh tone of sugar on Monday. An empowered group of ministers (EGOM) on food commodities, headed by Union Finance Minister Pranab Mukherjee, is likely to meet on Monday to decide on the matter. The EGoM has already taken a call on lifting the ban on onion exports.

The government is likely to consider the matter in light of predictions of good harvest in India, the world's second largest producer of the sweetener. Shipments were earlier allowed under the pending advance authorization scheme and the advance licence scheme and now half a million tonne will also be allowed to be exported under the open general license system.

Global sugar prices have continued to remain volatile and reached close to the record highs towards end of the last calendar year as the supply concerns from Brazil and policy uncertainty from India that has been keeping the overall supply-demand scenario in grey. Prices jumped to a 30 year high as the Brazilian harvest seemed set to be significantly lower compared with earlier expectations. Although prices came down in the following couple of fortnights, they have been rallying again now amidst concerns that global supplies will be down due to a storm in Australia and drought in Russia.

Earlier, the Indian sugar mills association (ISMA) had projected the sugar output at over 25 million tonne for this season. This will leave a surplus of around 2 million tonne after accounting for domestic consumption. The industry body has been demanding for permission to export at the earliest in order to benefit from the high global prices. The government while has already allowed export of sugar raws lying at ports, it has been more cautious to allow general exports due to high domestic inflation and political sensitivity of the matter.

The move has also been supported by Food and Agriculture minister Sharad Pawar. He had stated recently that with high sugar prices currently prevailing in global markets and strong uptic in domestic production likely this season, it was the right time for the ban on export of the commodity to be lifted. Exports at this time will help improve returns to the sugar mills which in turn will support higher crop prices back home in India and hence higher production next year as well. Sans this, domestic prices of cane might crash which will discourage sugar sowing next year, again bringing down production.  

The S&P CNX Nifty is currently trading at 5,458.55 down by 0.40 points or 0.01%. The index has touched a high of 5,483.55 and a low of 5,433.85 respectively. There were 22 stocks advancing against 28 declines on the index.

The top gainers of the Nifty were Wipro up by 2.96%, Jindal Steel up by 2.27%, Sterlite Industries up by 2.15 %, IDFC up by 1.75% and L&T up by 1.68%.

The top losers of the index were Tata Motors down by 2.41%, Hero Honda down by 2.38%, Tata Power down 2.19%, DLF down 2.04% and Suzlon was down by 1.68%.

Asian equity indices were trading mostly in the red; Hang Seng was down by 0.37%, Jakarta Composite slid 0.21%, Straits Times slipped 0.46%, Seoul Composite dropped 0.61% and Taiwan Weighted declined 0.26%.

On the flip side, KLSE Composite was trading flat, Shanghai Composite gained 0.14% and Nikkei 225 increased by 0.01%.

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