Markets lose some of their early gains; breadth turns negative

The local equity markets have pared some of their early gains in late morning session due to some profit booking at higher levels, broader markets too lost some of their early gains but still trades in positive territory while market breadth slipped into the negative zone. Index biggie like Reliance and IT stocks saw some profit booking after sharp gains in last week. Adding to this, majority of the Asian markets   were trading in negative terrain and US index futures too have marginally entered the red in screen trade, keeping the domestic sentiments in cautious mood. NSE Nifty and BSE Sensex were still below their psychological levels of 5,700 and 19,000 levels respectively. In the sectoral space Capital Goods (CG), Bankex, Fast Moving Consumer Goods (FMCG), Auto and Power stocks led the gains. However, Healthcare (HC), IT , Oil and Gas, Metal  and Realty  stocks were witnessing some profit booking .The Overall market breadth on BSE was slightly negative, decliners outnumber the advances in the ratio 1319:1303, while, 91 shares remained unchanged. Fertilizer stocks are trading in green. A secretarial panel is meeting today is scheduled to discuss the Urea model. National Fertiliser, Rashtriya Chemicals and Chambal Fertilisers were all trading higher.

The BSE Sensex advanced 40.07 points or 0.21% at 18,855.71. The index has touched a high of 18,967.18 and a low of 18,799.57 respectively. 

The BSE Mid cap and Small cap indices were up by 0.19% and 0.25%, respectively.

The top gaining sectoral indices on the BSE were, Capital Goods (CG) up by 1.02%, Bankex up by 0.96%, Fast Moving Consumer Goods (FMCG) up by 0.74%, Auto up by 0.63% and Power up 0.40%.While Healthcare (HC) down 0.99%, IT down by 0.75%, Oil and Gas down by 0.67% Metal down 0.60% and Realty down 0.56% were the major losers on the index.

The top gainers on the Sensex were Hindustan Unilever (HUL) up 2.25%, Tata Motors up by 1.80%, L&T up by 1.73% NTPC up 1.70 % and ICICI Bank was up by 1.21%.Sterlite Industries down by 2.73%, Jaiprakash Associates down by 2.71%, Reliance Communication down by 1.73%, Infosys down by 1.11% and RIL down by 0.95% were the top losers on the index.

After nearly two years of delay, the ministry of civil aviation finally seems set to get the new ground-handling policy implemented. It has asked all airport operators in the country to initiate steps to implement the new policy from April 1 in an effort to enhance safety and improve quality of services.

The move comes even as the airlines continue to protest the new policy. All the private airlines have been opposing the new policy citing various reasons from causing unemployment among the current ground handling staff to potential losses that will accrue to them. The government did defer the implementation of the policy on airlines' plea at least thrice. Now however, the government has rejected any further delays and the Delhi high court too has recently rejected a plea by airlines to get a stay on implementation of the policy.

The new policy requires that the airlines outsource the ground handling operations at the airports to other operators selected for the job. Under the new policy, only the government owned Air India, the airport operator and a third private operator selected through the competitive bidding will be allowed to provide ground handling services. All private carriers will have to tie up with one of these to provide services. Obviously, this will hike the costs of ground services for airlines.

The civil aviation ministry had announced the new policy in 2008 and was expected to put in place the new ground-handling norms from January 1, 2009. However, the downturn in the economy following the global financial crisis and resulting substantial negative impact on civil aviation industry forced it to defer the implementation thrice as the move was strongly opposed by the airlines which were then struggling with declining air-traffic. 

Now, however, things have changed sharply in the aviation space. The industry has enjoyed more than a year of surging air traffic, and air fares have already crosses the peaks seen in the pre-crisis period. The industry, though still under somewhat pressure by accumulated substantial and rising cost of aviation turbine fuel, is certainly in much better position to cope with the small financial burden that it will face with the new policy.

Nonetheless, the implementation of the new ground handling norms will have some impact on the profitability of airlines. That is the reason that carriers have been looking to get yet another postponement for the policy. However, this looks difficult now as the civil aviation ministry feels that with surging demand for air-travel demand, it was the best time to implement the new policy and is keen to get the same kick-started on April 1.

The S&P CNX Nifty was up by 7 points or 0.12% at 5,661.25. The index has touched a high of 5,693.75 and a low of 5,643.20 respectively.

The top gainers of the Nifty were HUL up by 2.41%, L&T up 1.96%, Tata Motors up by 2.06% NTPC up1.59% and ICICI Bank up 1.32%.

The top losers of the index were Sun Pharmaceuticals down by 3.86%, JP Associates down 2.77% ,Sterlite Industries were down by 2.61 %, Sesa Goa down by 2.11% and Reliance communication  was down by 1.73%.

Majority of the other Asian markets were trading in the red; Hang Seng slid 0.72%, Jakarta Composite declined 0.36%, KLSE Composite lost 0.08%, Nikkei 225 shed 0.60%, Straits Times was down by 0.57% and Taiwan Weighted trimmed 0.67%. On the other hand, Seoul Composite surged 0.11%, Shanghai Composite gained 0.23%.

Unit-8, 3rd Floor, First Mall, The Mall, Ludhiana-141001, Punjab (INDIA).

To unsubscribe or change subscriber options visit: http://www.aweber.com/z/r/?TJzsLEwstCyc7OysHMyctEa0nCwsDKysnA==