Indian frontline indices are displaying listless performance in the afternoon session of trade as the aimless benchmarks are gradually crawling only sideways in a tight band around the psychological 5,550 and 19,500 levels, lacking any significant upside triggers. Investors are looking to take profits off the table from the Oil and gas and the defensive healthcare counters after stocks from those counters gained good traction on Tuesday. While the Index heavyweight Reliance Industries failed to make its presence felt in the session as it receded by around three fourth of a percent and limited the upside chances for the local benchmarks. However, shares from FMCG and Capital Goods sectors are seeing some buying interests in the session and are capping the downside for the bourses. Meanwhile banking bellwether SBI has pared most of its intraday losses in the noon session after reports emerged that government is supporting the bank's plan to raise Rs 20,000 crore via rights issue and is ready to contribute Rs 12000 crore towards the issue. The wilt in international crude oil prices which has declined well below the $100-a-barrel level, negated the adverse impact of negative opening of European markets on local sentiments. Moreover, recovery in some of the ruffled Asian peers too spurred optimism in the domestic markets.
Furthermore, the broader markets continued to trade on a firm note and outshine their larger peers by a fat margin. The markets consolidated on weaker volumes of over Rs 0.29 lakh crore in the early noon session while the turnover for NSE F&O segment also remained on the lower side compared to Tuesday at over 0.34 lakh crore. The market breadth on the BSE was in favor of advances in the ratio of 1484:1058 while 118 scrips remained unchanged.
The BSE Sensex eased 3.82 points or 0.02% at 18,491.80. The index touched a high and a low of 18,505.10 and 18,400.44 respectively.
The BSE midcap index advanced 0.46% and the smallcap index gained 0.58% points.
On the BSE sectoral front, FMCG up 0.87%, Capital Goods up 0.56%, Power up 0.53%, PSU up 0.48% and Consumer Durables up 0.41% remained the major gainers.
While, Oil and Gas down 0.54%, Healthcare down 0.23%, Teck down 0.11% and IT down 0.01% were the only laggards in the BSE sectoral space. The top gainers on the Sensex were NTPC up 1.44%, BHEL up 1.37%, ITC up 1.35%, Tata Motors up 1.17% and R Com up 0.98%.
On the flip side ONGC down 1.61%, Hero Honda down 1.22%, Cipla down 1.14%, Maruti Suzuki down 1.13% and Bharti Airtel down 0.90% were the major losers on the index.
Meanwhile, an informal group of ministers is likely to decide whether to permit cotton exports beyond the current ceiling of 55 lakh bales for the current season or not. A decision will be taken on the demand of allowing exports of another 15 lakh bales of cotton to exhaust the excess stocks. Against the backdrop of the demand from the Agriculture Ministry, supported by the Commerce Ministry, that the 55 lakh bales limit be raised. Cotton season runs from October to September and the total cotton production, estimated by the Cotton Advisory Board is 320 lakh bales while, the domestic consumption of cotton is estimated to be 240 lakh bales, hence as per current scenario there is surplus of cotton in the country.
The government on February 25 had put a cap of 55 lakh bales (170 kg each) on natural fibre exports for the 2010-11 season to protect domestic textiles industry in the wake of rising prices of the raw material. If export allotted till February, was 65 lakh bales. The cap was decided by the group comprising Finance Minister Pranab Mukherjee, Agriculture Minister Sharad Pawar, Commerce and Industry Minister Anand Sharma and Textiles Minister Dayanidhi Maran.
It has been reported that there is unsold stock with the traders of about 45 lakh bales and about 1.5 million bales may be brought to the market by the farmers. But the spinning units are averse to any such decision as further exports may create scarcity of cotton supplies in the domestic market as they have also expressed their concern that if the export quota is increased it will only help the middlemen as the growers are not having excess stock. "Cotton prices have softened to about Rs 45,000 a candy from Rs 62,000 a candy. If the exports are resumed, the millers will have to suspend operations. Given the high cotton prices at present, they would not even recover the variable cost component for the spinning industry."
According to the Cotton Advisory Board figures, the crop forecast for the current season has been lowered at 312 lakh bales in April from 329 lakh bales due to unseasonal rains in states like Andhra Pradesh and Maharashtra in last December. Meanwhile, the International Cotton Advisory Committee has said that global cotton production could reach 27.3 million tonnes by 2012 due to improving prices. It said after seven consecutive months of increase, cotton prices significantly tumbled in April but have stabilized at record high levels. The S&P CNX Nifty amassed 3.05 points or 0.05% at 5,553.10. The index touched high and low of 5,556.60 and 5,526.50 respectively.
The top gainers on the Nifty were NTPC up 1.47%, BHEL up 1.45%, Tata Motors up 1.25%, ITC up 1.21% and GAIL up 1.20%.
On the other hand, ONGC down 1.54%, Hero Honda down 1.31%, Cipla down 1.16%, Bharti Airtel down 1.02% and Ambuja Cement down 0.95% were the major losers on the index.
On the Asian front, Shanghai Composite added 0.28%, KLSE Composite rose 0.06% and Nikkei 225 advanced 0.07%. On the flipside, Hang Seng slipped 0.71%, Jakarta Composite shed 0.39%, Straits Times slipped 0.17%, Seoul Composite sank by 0.78% and Taiwan Weighted dropped 0.55%.
The European markets have opened a flat to negative note as the France's CAC 40 eased 0.27%, Germany's DAX shed 0.12% and London's FTSE lost 0.10%.
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