Benchmarks continue its volatile trade at the lowest point of the day

Indian equity indices continue its volatile trade and are trading in a negative zone hovering around the lowest point of the day as investors become skeptics about the bleak outlook of the economy on reports that monsoon rains in India will be "below normal" for the second time in three years limited the upside chances for the markets as marketmen feared that it may potentially lower farm output and accelerate inflation. Market participants were seen piling up the positions in Capital Goods and IT while, selling was witnessed among Consumer Durables, Realty and FMCG. All the Asian markets were trading in green barring Straits Times, while the European markets were trading mix on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,300 and 17,600 levels, respectively. The market breadth on the BSE was in favor of declines in the ratio of 947:1761 while, 122 scrips remained unchanged.

Moreover, Tata Motors low cost Nano faced a stiff resistance from Sri Lankan autorickshaw drivers as hundreds of three-wheel taxis drivers held up traffic in country's capital demanding that the government should stop allowing anymore use of Tata Nanos on the streets that offer stiff competition to them. The drivers were against a taxi company, linked to a ruling party politician, from using a fleet of Nanos. The politician was seen at the wheel of a Nano with President at the passenger seat after Nano Cab Company launched the cheaper taxi service earlier this month. The cab company wants to increase the current fleet of 45 to 200 by the end of the year while the Federation of Self-Employees (FOSE) said their members would lose business if the Nano cabs were allowed to expand. As per FOSE, the President had promised in his election manifesto to grant them tax concessions to help reduce environment pollution caused by the Indian-made three wheelers, which have become the common man's taxi. The Nano service is offered at a lower price than air-conditioned cars and their fares are comparable to three-wheeler charges.

The BSE Sensex is currently trading at 17,505.87 down by 54.43 points or 0.31% after trading as high as 17,678.86 and as low as 17,492.19. There were 10 stocks advancing against 20 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap and Small cap indices fell by 0.90% and 0.85% respectively. 

On the BSE sectoral space, Capital Goods up 0.43% and IT up 0.22% were the only gainers, while Consumer Durables down 3.22%, Realty down 2.31%, FMCG down 0.96%, Metal down 0.49% and Teck down 0.47% were the major losers on the index.

The top gainers on the Sensex were M&M up by 1.74%, Tata Power up by 1.70%, Cipla up by 1.69%, ONGC up 1.56% and Bajaj Auto up 1.21%. On the flip side, HUL down by 3.44%, Bharti Airtel down by 3.15%, Maruti down by 2.28%, Jindal Steel down by 1.76% and Hindalco down by 1.74% were the top losers on the index.

Meanwhile, the Empowered Group of Ministers (EGoM) on food has decided to meet on June 23 to take a call on the export of sugar. The EGoM meeting will take place without Agriculture Minister Sharad Pawar. However, he wants the EGoM meeting to take place and give permission for additional export of at least 1 million tonnes of sugar.

The agriculture minister has sent a two page note to Prime Minister's Office, Finance Ministry and Cabinet Secretariat. While, elaborating agriculture ministry's stance on the issue of sugar export, Pawar has suggested that government to hold the meeting, even in his absence, and take the decision on the issue. As the agriculture minister has expressed his stand in the note, the Cabinet Secretariat has requested finance ministry to organize the meeting of the EGoM on food.

However, the Food Minister K V Thomas is against of any additional increase in the volume of sugar for export, till Diwali. Food minister has recently said, no further export of sugar should be allowed before Diwali. However, Sharad Pawar is in support for additional export of sugar.

The Indian sugar mills have requested government to give permission for additional sugar export as the production of sugar is likely to increase in the next season from October. India is the world largest consumer of sugar and the second largest producer of sugar. During 2010-11 season, the sugar production is expected to increase by almost 28% at 24.2 million tonnes from 18.8 million in the season of 2009-10.  In present season, the production of sugar is estimated to be at 26 - 26.5 million tones.

In April 2011, under the Open General Licence (OGC), government allowed around 500,000 tonnes of sugar for export, which means the movement of shipments without any restriction. About 10% of this has to be exported through government agencies.

The S&P CNX Nifty is currently trading at 5,263.15, down by 12.70 points or 0.24% after trading as high as 5,310.50 and as low as 5,262.50. There were 22 stocks advancing against 28 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 1.80%, Tata Power up by 1.78%, M&M up by 1.73%, Cipla up by 1.60% and ONGC up by 1.45%. On the other hand, Bharti Airtel down by 3.35%, HUL down by 3.26%, Ranbaxy down by 2.64%, Maruti down by 1.97% and Hindalco down 1.89% were the major losers on the index.

All Asian markets continued to trade on a positive note barring Straits Times down 0.08% while, Shanghai Composite rose 0.09%, Hang Seng added 0.04%, Jakarta Composite gained 0.39%, KLSE Composite inched up 0.42%, Nikkei 225 jumped 1.79%, Seoul Composite climbed 0.77% and Taiwan Weighted increased 0.27%.

The European markets were trading in mix, with France's CAC 40 eased 0.08%, Germany's DAX gained 0.02% and London's FTSE fell 0.09%.

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