Trade remain weak for the benchmarks; Nifty below 5875 mark

The benchmark indices have lost some more ground after making a positive start, though the broader markets are trading in green but the gains remain marginal, BSE Mid-cap and Small-cap indices were up by 0.40% and 0.76%, respectively. Some BSE sectoral indices like Consumer Durables and Health Care are trading in green but all others are in red. The Asian markets continue to trade mixed, Jakarta Composite, KLSE Composite and Nikkei were still reeling in red. The market breadth on the BSE was in favour of advances in the ratio of 1549:1124 while 88 scrips remained unchanged.

The new ground handling policy that government has been contemplating for quite some time might get delayed further after airlines moved to court seeking direction to defer the implementation of policy. The new policy was to be implemented from start of this fiscal but airlines were later given four weeks to finalize preparations on the ground. Carriers continue to oppose the move that they contend will push up their costs and create a monopolistic atmosphere in ground handling services. Following an application by the Federation of Indian Airlines challenging the new ground handling policy, the Supreme Court on Monday issued a notice to the central government. The Court, however, has not passed any stay order against the implementation of the policy as yet. The issue will come for hearing again on April 25. All the airline stocks were trading higher, Spicejet was up by 2.03%, Jet Air India was up by 2.01% and Kingfisher was up by 2.37%.

The BSE Sensex lost 164.92 points or 0.84% at 19,536.81. The index touched a high and a low of 19,770.21 and 19,536.81 respectively.

The BSE Mid-cap and Small-cap indices gained 0.40% and 0.76%, respectively.

Some sectoral indices on the BSE are trading in the green. Consumer Durables up 1.68% and Health Care up 0.06%

On the flip side, IT down 1.04%, Teck down 0.77%, Bankex down 0.68%, Oil & Gas down 0.68% and Metal down 0.53% were the major losers.

The top gainers on the Sensex were Cipla up 1.30%, Hero Honda up 1.12%, RCom up 0.82%, BHEL up 0.61% and Tata Motors up 0.24%.

On the flip side, Tata Power down 1.29%, Infosys down by 0.91%, Bajaj Auto down 0.90%, M&M down 0.69% and Jindal Steel down 0.58% were the losers on the index.

Meanwhile, Spinning mills are cheering the decision by the Indian government to free the export of yarn from country. The government had earlier in December 2010 imposed a quota of 720 million kg on exports of cotton yarns by the Indian producers which created an extremely difficult market situation with raising prices in importing countries while crashing prices in India.

The spinning industry contends that with the quantitative ban in force, almost nothing moved out of the country from 15th of January till 31st March in terms of yarn exports. This led to significant surplus supply at home resulting in crashing prices of yarn and losses to spinners who had earlier bought cotton at a much higher price and were now getting much lower prices of yarn.

The government has now lifted the ban but on condition that yarn should be registered with the Directorate General of Foreign Trade (DGFT) prior to shipments. Spinners feel the move would help prevent further crashing of cotton yarn prices in the domestic market and help the millers cover losses they have been incurring over the last one quarter or so. The move will also help ensure that cotton prices do not crash too much and hence ensure reasonable sowing in the new season.

With regard to the opposition to yarn exports expressed by domestic apparel players, the spinning industry contends that installed spinning capacity has been going up at a rapid pace. In this wake, yarn production would be more than sufficient to meet the local demand even after taking into account all the exports. On the other hand, if exports continued to be restricted, it will dampen investment in the spinning business, and hence ultimately impact the domestic apparel producers as well.

Not only the Indian producers but even the foreign importers who relied on Indian cotton yarn have welcomed the move. "The imposition of export restriction by Indian authorities, along with the one on cotton fibre, was impacting our business relations with India and casting a shadow on the EU-India FTA negotiations in textiles and clothing," said the Euratex, an umbrella body representing textile players of European Union and welcomed the decision to free yarn exports.

The S&P CNX Nifty lost 51.30 points or 0.87% at 5857.15. The index touched high and low of 5928.65 and 5855.85, respectively.

The top gainers on the Nifty were Ranbaxy up 2.40%, Ambuja Cement up 1.85%, Hero Honda up 1.14%, Cipla up 1.08% and Sesa Goa up 0.97%.

On the other hand, DLF down 2.18%, M&M down 1.95%, Kotak Bank down 1.92%, Tata Power down 1.90% and Wipro down 1.48% were the major losers on the index.

All the Asian markets are trading in green barring Jakarta Composite down 0.43%, KLSE Composite down 0.16% and Nikkei down 1.06%.

The gainers were Hang Seng advanced 1.46%, Straits Times up 0.64% and Seoul Composite up 0.69%.

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