After a sharp up move in early trades and a subsequent mild retreat, the market is now trading near its day's high point thanks to some strong buying in Automobile, PSU, Realty, Capital Goods and Oil & Gas stocks. The investor's confidence returned to market after three day of substantial losses at local bourses on reports of a firming trend on Japan's Tokyo Stock Exchange and other Asian bourses following overnight gains in the US market which buoyed the sentiment at home too. However, surging crude oil prices, which though seem to have turned less aggresive, could again pop out as reason to worry thereby influencing the trading sentiment. Benchmark crude for April delivery surged $1.82 to $102.89 a barrel, on the New York Mercantile Exchange as the air attacks by US and allied forces intensified in Libya after the autocratic leader Muammar Gaddafi opined that he would not relinquish powers and pledged to continue the "long war".
The market up move could also be contributed by the surge of Index heavyweight--RIL which is up by around 1.5%.Meanwhile, sugar stocks like Shree Renuka Sugars and Balrampur Chini, Bajaj Hindustan too have spiked up on news that EGOM will met today to allow on 200,000 tonne of sugar exports under unrestricted sales. This comes in backdrop of Agriculture Minister Sharad Pawar seeking the intervention of the Finance Minister for an early decision on this issue because the window to export sugar from India is available only upto end of April. Both the benchmark indices are gyrating around their psychological level of 18000(Sensex) and 5400 (Nifty) respectively. While the broader indices have fared better than the larger peers and a garnering gain of over 0.50 each. The overall market breadth on BSE was in the favour of advances which have thrashed declines in the ratio of 1454:730, while, 89 shares remained unchanged.
The BSE Sensex is currently trading at 17,974.05, up by 135.00 points or 0.76%. The index has touched a high of 17,990.59 and a low of 17,878.80 respectively. There were 27 stocks advancing against just 3 declines on the index.
The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 1.01% and 0.76% respectively.
The top gaining sectoral indices on the BSE were, Auto up by 1.32%, Public Sector Undertaking (PSU) up by 1.19%, Realty up by 1.07%, Capital Goods up by 1.01% and Oil & Gas up by 0.93%. While there were no losers on the index.
The top gainers on the Sensex were Maruti Suzuki up by 2.27%, Jaiprakash Associate up by 2.11%, Bharti Airtel up by 1.56%, Tata Motors up by 1.48% and Reliance Industries up by 1.40%.
On the flip side, ICICI Bank down by 0.41%and Jindal Steel down by 0.18% were the only losers on the index.
Meanwhile, having waited for several months, the government is likely to allow around 200,000 tonne of sugar exports on Tuesday under unrestricted sales or the open general license (OGL) which will be first tranche of the half a million tonne of exports announced earlier.
Last December, the Union Food and Agriculture Minister Sharad Pawar had announced sugar exports to the tune of 5 lakh tonne. However, the government, hit by high food inflation, kept the issue undecided and later referred it to the Empowered Group of Ministers (EGoM), headed by Finance Minister Pranab Mukherjee. The group is slated to meet on Tuesday to consider operationalising the announcement.
The reason behind not allowing sugar exports even as domestic production scenario seemed rosy and prices were crashing was overall high food inflation. The government had withheld the request by the farm ministry as food inflation was not witnessing the traditional decline over the months of Nov-Dec. However, with the food inflation now showing significant decline in the months of Jan-Feb, there is a possibility that government will allow some exports.
The meeting of the EGoM is being held after Pawar sought the intervention of the Mukherjee for an early decision on this issue because the window to export sugar from India is available only up to end of April. In May, sugar from Brazil, the largest sugar producer in the world, will start coming into global markets, making it very difficult for Indian producers to exports. Also, global prices might come down further by then, which will make exports unprofitable by Indian exporters.
According to the agriculture ministry, extension of stock limits and substantial surplus production of the sweetener has depressed domestic prices below cost of production. If prices remain down, it will impact the payments to cane growing farmers, which in turn will impact the area under sugarcane cultivation in the next season, thus impacting sugar output next year. 'If sugar prices are not stabilized and cash flow to mills are not improved, I fear that we will end up paying a huge subsidy to clear cane payment arrears of farmers,' Pawar said while seeking intervention of Mukherjee in exports.
The S&P CNX Nifty is currently trading at 5,406.05, higher by 41.30 points or 0.77%. The index has touched a high of 5,408.90 and a low of 5,376.15. There were 43 stocks advancing against 6 declines on the index.
The top gainers of the Nifty were SAIL up by 2.69%, Maruti Suzuki up by 2.57%, JP Associate up by 2.17%, Bharti Airtel up by 1.91% and Tata Motors up by 1.67%.
BPCL down by 0.59%, Sunpharma down by 0.48%, ICICI Bank down by 0.24%, HCL Technologies down by 0.11% and Jindal Steel down 0.08% were the major losers on the index.
Most of the Asian peers were trading in the green; Shanghai Composite was up by 0.22%, Hang Seng gained 0.23%, Nikkei 225 jumped 4.04%, Straits Times inched up 0.25%, Seoul Composite added 0.52% and Taiwan Weighted rose 0.82%.
On the flip side KLSE declined 0.03% and Jakarta Composite shed 0.25%.
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