Benchmarks continue their rally for the fourth consecutive day

The Indian equity markets have made a gap up start tracking positive cues from the firm Asian markets. All the Asian counterparts were trading in the positive terrain at this point of time, while smart rally on Wall Street overnight on the back of confident corporate earnings and signs of a stronger job market also aided to the sentiments. Back home, sustained buying in all the key heavyweights barring Tata Power along with broader indices supported NSE's -- Nifty -- to cross its crucial 5,550 mark; however BSE's -- Sensex -- was hovering near its psychological 18,500 level. Software witnessed the maximum gain in trade followed by technology and capital goods with no losers on the BSE sectoral space. Moreover, sentiments remained positive on the hopes for economic reforms with the government tabled two key reforms bills in parliament early this week. The broader indices' stocks are also in demand for today's trade. The market breadth on the BSE was positive; there were 1146 shares on the gaining side against 465 shares on the losing side while 65 shares remained unchanged.

The BSE Sensex opened at 18,480.69; about 130 points higher compared to its previous closing of 18,350.74, and has touched a high of 18,547.61 while low remain its opening.

The index is currently trading at 18,497.51, up by 146.77 points or 0.80%. There were 29 stocks advancing against just 1 decline on the index.

The overall market breadth has made a strong start with 68.38% stocks advancing against 27.74% declines. The broader indices too were performing well in the trade; the BSE Mid cap and Small cap indices surged 0.64% and 0.57% respectively. 

The top gaining sectoral indices on the BSE were, IT up by 1.87%, TECk up by 1.52%, CG up by 1.93%, FMCG up by 0.90% and CD was up by 0.84%. While there were no losers on the index.

The top gainers on the Sensex were Infosys up by 2.20%, TCS up by 1.46%, Wipro up by 1.38%, ICICI Bank up by 1.29% and L&T was up by 1.10%.

Tata Power down by 0.39% was the lone loser on the index.

Meanwhile, Cotton prices have been at elevated levels for quite some time. After having seen a strong rally in second half of the last calendar year owing to tightness in global demand-supply equation, the commodity has refused to correct beyond a degree in the current year so far as demand remains strong.

The small corrections seen in recent weeks have been halted by farmers and traders hoarding stocks in anticipation of prices rising back again. There has been a global deficit in the cotton production in the current year which is boosting expectations of farmers and stockiest that the global prices may touch a newer high before seeing any major correction.

Further, at the global level, prices are expected to remain firm even in the next season even as a supply shock to high prices is expected. "Although cotton prices are expected to decline from current record levels, it is likely that prices will stay substantially higher than the average of 60 cents per pound that prevailed during the past decade," the International Cotton Advisory Committee said in a recent report indicating prices would be relatively firm in medium term as well.

"Factors such as competition from food crops, limited available resources (including land, seeds, water and equipment), and government policies are preventing cotton-growing areas from rising further," the report said. Many analysts feel that the impact of rising cotton prices will be seen in apparel prices and as well as on margins of textile players.

However, there will be no shortage of cotton in the next season despite surging demand as production is expected to be higher than consumption in 2011-12, according to International Cotton Association (ICA). According to the ICA estimates, overall production was expected to be 27.65 million tonne in 2011-12 season (August-July), nearly three million tonne more than the output in 2010-11 season. Consumption on the other hand was expected to be 26.4 million tonne in the next season.

The S&P CNX Nifty opened at 5,588.65; about 68 points higher compared to its previous closing of 5,522.40, and has touched a high and a low of 5,588.70 and 5,562.90 respectively.

The index is currently trading at 5,563.05, higher by 40.65 points or 0.74%. There were 39 stocks advancing against 11 declines on the index.

The top gainers of the Nifty were Hindalco up by 2.32%, HCL Tech up by 2.28%, Sun Pharma up by 1.79%, SAIL up by 1.67% and Wipro up by 1.48%.

Kotak Bank down by 1.03%, Ranbaxy down by 0.54%, BPCL down by 0.49%, Maruti Suzuki down by 0.34% and Cairn was down by 0.20%, were the major losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite was up 31.44 points or 1.07% to 2,978.14, Hang Seng was up 212.19 points or 0.93% to 23,127.47, Jakarta Composite was up 69.57 points or 1.96% to 3,625.80, KLSE Composite was up 3.37 points or 0.22% to 1,517.21, Nikkei 225 was up 75.88 points or 0.80% to 9,510.89, Straits Times was up 28.44 points or 0.93% to 3,071.47, Seoul Composite was up 17.14 points or 0.84% to 2,053.92 and Taiwan Weighted was up 61.56 points or 0.72% to 8,637.96. 

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