The Indian equity markets are trading in the negative terrain after making a flat start continuing the previous day's downtrend, investors booked profit on the back of rising crude oil prices, which increased inflation and interest rates worries. The US markets closed in green overnight but the gains remained modest as oil prices rose while, most of the Asian markets were trading in the positive terrain at this point of time. Back home, sustained selling in key heavyweights like Reliance Industries, Infosys, NTPC, SBI etc were keeping the momentum on the negative side. Realty goods witnessed the maximum gain in trade followed by consumer durables and power while, technology, software and auto stocks remained the top losers on the BSE sectoral space. The broader indices were outperforming the benchmark indices. The market breadth on the BSE was positive; there were 1,151 shares on the gaining side against 631 shares on the losing side while 61 shares remained unchanged.
The BSE Sensex opened at 19,620.88; about 8 points higher compared to its previous closing of 19,612.20, and has touched a low of 19,542.99 while high remain its opening.
The index is currently trading at 19,582.56, down by 29.64 points or 0.15%. There were 14 stocks advancing against 16 declines on the index.
The overall market breadth has made a strong start with 62.45% stocks advancing against 34.24% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 0.64% each.
The top gaining sectoral indices on the BSE were, Realty up by 1.36%, CD up by 0.39%, Power up by 0.35%, HC up by 0.32% and Metal was up by 0.22%. While TECk down by 0.71%, IT down by 0.69%, Auto down by 0.47% and Bankex down by 0.33% were the only losers on the index.
The top gainers on the Sensex were Hindalco up by 1.34%, DLF up by 1.13%, HDFC up by 1.13%, Tata Power up by 1.04% and Reliance Infra was up by 0.62%.
On the flip side, Bharti Airtel down by 1.70%, Maruti Suzuki down by 1.59%, Sterlite Industries down by 1.50%, TCS down by 1.17% and Tata Motors down by 0.97% were the top losers on the index.
Meanwhile, Global tea prices continue to remain firm despite the increase in production in last calendar year as a strong supply response to high prices was witnessed. Lower production in India due to weather related troubles coupled with high global prices have boosted tea prices in Indian markets as well and going forward the commodity is expected to remain bullish for at least another couple of quarters.
In fact global tea prices have been quite volatile in the past two years, with prices in 2008 and 2009 respectively swinging within a 25-30% price range. The average growth in prices in 2010 was again over 10%. High prices yielded a strong supply response as well. While there were wide swings, on the whole tea prices have remained relatively strong in historical context in both Indian and global markets.
The industry has remained firm even as global production increases. It was apprehended that strong supply response to high prices of the commodity seen last year will bring down prices this year. However, production in India has been somewhat lower in 2010 owing to weather related problems. The trend has not changed in 2011 wither and production was down in the month of January as well. Although the decline in production has been small, given the continued increase in domestic demand, prices have remained firm.
Looking at the global scenario, markets continue to remain in deficit mode following the sharply lower production in 2008. While there has been strong growth in production in 2010 which hit record high level of 320 million KG, the sharp increase was on a low base of 2009 and has failed to increase stocks much. Compared with production in 2008, the increment in global production is just over 2%. World tea stocks continue to remain at record low levels and have been supporting prices in both Indian and global markets.
Analysts believe there is around 100-120 million kg deficit in the global market which has been continuing since the poor crop of 2008. Even with strong production outlook of Kenya and Sri Lanka, prices have been firming up mainly because of this deficit as well as rising consumption. Looking back at India too there was a shortfall of around 50 kg in 2009 and in 2010 the shortfall has only increased. Overall therefore it seems that near term outlook for tea prices is quite strong as global markets struggle under deficit stocks.
The S&P CNX Nifty opened at 5,888.55; about 3 points lower compared to its previous closing of 5,891.75, and has touched a high and a low of 5,889.80 and 5,867.40 respectively.
The index is currently trading at 5,879.10, lower by 12.65 points or 0.21%. There were 19 stocks advancing against 31 declines on the index.
The top gainers of the Nifty were Ranbaxy up by 1.42%, Hindalco up by 1.41%, Tata Power up by 1.28%, BPCL up by 1.08% and DLF up by 1.05%.
Sesa Goa down by 1.78%, Bharti Airtel down by 1.74%, Maruti Suzuki down by 1.74%, Tata Motors down by 1.29% and Cairn was down by 1.28%, were the major losers on the index.
Most of the Asian markets were trading in the green; Shanghai Composite was up 3.29 points or 0.11% to 3,004.65, Jakarta Composite was up 8.45 points or 0.23% to 3,736.25, KLSE Composite was up 4.42 points or 0.28% to 1,557.31, Nikkei 225 was up 36.91 points or 0.39% to 9,621.28 and Taiwan Weighted was up by 15.74 points or 0.18% to 8,867.72.
On the flip side, Hang Seng was down 9.69 points or 0.04% to 24,275.36, Straits Times was down 6.64 points or 0.21% to 3,163.69 and Seoul Composite was down by 6.00 points or 0.28% to 2,120.71.
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