Local bourses trim some losses; lower trade deficit for March 2011 aids recovery

After falling from higher levels and a subsequent rebound, the equity markets are currently trading in the red zone with investors treading cautiously amid a slew of quarterly earnings reports and listless global leads as most of the Asian counterparts are not trading on account of Labor day holiday . It appears that investors are not willing to take chances before decision of the key policy rates in the central bank's monetary policy statement which is due to be released tomorrow. The benchmark indices have been closing lower for the past five sessions and this is for the sixth consecutive session that fears of Inflations and rate hike are weighing on the marketing sentiment thereby prompting the trade to remain sluggish. However, the benchmarks have recovered from their low point after data released by the Government showed that India's merchandise exports rose by an impressive 43.9% at $29.13 billion in March 2011 while imports for the month were up 17.3% at $34.74bn. Trade deficit for March 2011 stood at $5.16bn versus $9.37bn in the year-ago period. On the global front, the US markets continued their up move for yet another day on Friday taking the major indices to multiyear high on the back of some good earnings reports, while a survey reported improvement in the consumer sentiments. Meanwhile, the trading Asian counterparts are witnessing good gains in the trade, while the US future indices too are trading in green.

Backhome, on the BSE Sectoral front, stocks from CD, HC, FMCG counters are among the gainers, while, stocks from Bankex, Metal and PSU spaces are trading significantly lower.The benchmark 30 scrip index on the Bombay Stock Exchange on BSE is nearing its 19100 level; while S&P CNX Nifty s trading down by over 20 points.  The overall market breadth on BSE is in the favour of declines which have outpaced advances in the ratio of 1288:979, while, 89 shares remained unchanged.

The BSE Sensex is currently trading at 19,087.42, down by 48.54 points or 0.25%. The index has touched a high and a low of 19,253.87 and 19,038.10 respectively.There were 11 stocks advancing against 19 declines on the index.

The broader indices too dipped in red; the BSE Mid cap index was down by 0.51% while, Small cap index  declined 0.40%. 

The top gaining sectoral indices on the BSE were, CD up by 1.05%, HC up by 1.04%, FMCG up by 0.70%, Realty up by 54% and TECk up by 0.35%. While Bankex down by 1.73%, Metal down by 0.78%, PSU down by 0.76%, Auto down by 0.53% and CG down by 0.21% were the only losers on the index.

The top gainers on the Sensex were DLF up by 1.70%, Tata Power up by 1.30%, Bharti Airtel up by 1.21%, Cipla up by 0.79% and Infosys was up by 0.75%.

On the flip side, SBI down by 2.73%, Maruti Suzuki down by 1.88%, Bajaj Auto down by 1.52%, Sterlite Industries down by 1.44% and Jindal Steels down by 1.20% were the top losers on the index.

Meanwhile, in a meeting of the Trade and Economic Relations Committee (TERC) chaired by the Prime Minister Dr Manmohan Singh, a clearance has been given to launching of free trade agreement (FTA) negotiations with Australia after the feasibility study undertaken by the two sides found immense potential for improving bilateral trade.

Australian Trade Minister Craig Emerson also stated on Sunday that negotiations will start very soon and were expected to progress rapidly in wake of mutual benefits that both the countries are likely to reap from such a deal. Emerson is scheduled to meet his Indian counterpart, commerce and industry minister Anand Sharma, on May 12 in Canberra, for a multilateral event the occasion is likely to see the two charting out a roadmap for quick conclusion of negotiations.

Bilateral trade between India and Australia has grown rapidly in recent years, largely due to sharply increased exports from Australia of gold and coal. India too has picked up its textile and manufacturing exports to Australia. Total merchandise trade between the two countries reached around $16 billion, from $6 billion in 2005-06. Though the trade is skewed in favour of Australia, which is mainly because of India's surging energy needs and as a result rising coal imports.

A joint feasibility study was launched last year which stated that an Australia-India FTA was very feasible and highly desirable in wake of complementary nature of the two economies. While the rapidly growing Indian economy will need huge amounts of raw materials including coal in coming years, Australia as a major supplier of primary goods was perfectly compatible to India. The FTA will also provide impetus to political relations which though remain strong but have been impacted recently by some isolated incidents of violence against Indians.

The Australian minister said that not only an FTA will broaden the base of merchandise trade, but it will also remove barriers to services trade, facilitate and encourage bilateral investment. It will also address behind-the-border obstacles to trade. The two sides are hoping to conclude the negotiations by next year and implement the deal within 2012. India has already signed bilateral deals with 10 member ASEAN and Japan and negotiations are at very advanced stages with the European Union.

The S&P CNX Nifty is currently trading at 5,728.75, lower by 20.75 points or 0.36%. The index has touched a high and low of 5,775.25 and 5,714.35 respectively. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 2.40%, Dr Reddy's up by 2.16%, Cairn India up by 2.08%, DLF up by 1.73% and Ranbaxy up by 1.68%.

PNB down by 3.53%, SBI down by 2.76%, Ambuja Cement down by 2.53%, IDFC down by 2.37% and Bajaj Auto down by 2.30% were the major losers on the index.

Asian markets were trading in the positive terrain; Jakarta Composite gained 0.49%, Nikkei 225 surged 1.42%, Seoul Composite added 1.52% and Nikkei 225 zoomed 1.38%, Jakarta Composite increased 0.49%.

However, stock markets in China, Hong Kong, Malaysia, Singapore and Taiwan remained shut on account of Labor day holiday. While Japanese markets will be closed from Tuesday to Thursday amid Japan's annual Golden Week holiday.

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