Indian equities crawl sideways in the afternoon session

Indian equities are looking to consolidate their positions around previous closing levels as the benchmarks appeared exhausted and could only manage to crawl sideways in the afternoon session. The key indices are trading with a negative bias just below the neutral line after vivaciously rallying over 1,250 (Sensex) and 350 (Nifty) points in last six sessions as investors took a breather and resorted to mild profit booking in heavyweights. Position squaring was largely witnessed in rate sensitive automobile names amid some of them reporting their monthly sales numbers while shares of cement companies rose ahead of the announcement of monthly dispatches. Meanwhile, the Ministry of Commerce released India's export data which showed that India's merchandise exports rose 56.9% to $25.9 billion in May from a year earlier. Imports rose 54.1% to $40.9 billion, largely due to a rise in non-oil imports, which were up 71% from a year earlier at $30.75 billion while India's May trade deficit widened to $14.9 billion from $10.0 billion a year earlier, the data showed. Lackluster opening of European markets too undermined local sentiments while the overnight gains in international crude oil prices too have undermined sentiments. Heavy buying was witnessed in the High beta - Realty and Information Technology counters while profit booking was evident in Consumer Durables, oil and Gas and Healthcare pockets.

Moreover, the broader markets showed some resilience and they refused to succumb to the selling pressure evident on their larger peers, and were outclassing them in the afternoon session. The bourses consolidated on good volumes of over Rs 0.50 lakh crore as this being the initial day of the new series. The market breadth on BSE was in favor of advances in the ratio of 1573:1019 while 113 scrips remained unchanged.

The BSE Sensex is currently trading at 18,817.13 down by 28.74 points or 0.15% after trading as high as 19,031.38 and as low as 18,781.66. There were 17 stocks advancing against 13 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap and Small cap indices advanced by 0.46% and 0.65% respectively. 

On the BSE sectoral space, Realty up 2.66%, IT up 0.70%, FMCG up 0.54%, Power up 0.41% and PSU up 0.40% were the major gainers, while Consumer Durables down 1.26%, Oil and Gas down 0.65%, Healthcare down 0.22% and Auto down 0.15% were the only losers on the index.

The top gainers on the Sensex were DLF up by 3.80%, Hindalco up by 2.32%, ONGC up by 1.64%, R Com up 1.62% and R Infra up 1.19%.

On the flip side, Bharti Airtel down by 2.96%, Maruti Suzuki down by 2.11%, RIL down 2.11%, Tata Steel down 1.64% and HUL down 1.39% were the major losers on the index.

The Indian government is expected to allow additional export of sugar after evaluating the impact on retail prices in the domestic market. Food Minister K V Thomas on June 30 said that the government may consider allowing further exports of sugar after assessing the impact on retail prices due to shipment of one million tonnes of the sweetener.

Earlier in this week, the government had allowed for additional export of 500,000 tonnes of sugar, since April government has permitted 1 million tonnes of sugar export, because of falling domestic prices of sugar. In last six months, sugar prices have declined by more than 18%. State governments are demanding to further increase the export of sugar due to increase in production. Sugar mills in Maharashtra, the largest sugar producing state in the country, have been demanding that the government should allow export of two million tonnes of sugar.

After meeting Prithviraj Chavan, food minister said 'We are watching the situation. It (export) can only be allowed after considering the prices of sugar in the domestic markets. The Maharashtra CM has sought an additional sugar export of 20 lakh tonnes, citing the reason that the domestic output in this season is expected to touch 245 lakh tonnes,' food minister said.

The domestic sugar demand is around 21-21.5 million tonnes annually, while the current production estimate is 24.5 million tonnes. This leaves an extra sugar of around 3-3.5 million tonnes, the food minister said. 'The states want more exports considering the global sugar prices, but the government can consider this quantity for export keeping in mind the domestic situation as well as the coming festival season,' K V Thomas said.

India is the largest consumer and second largest producer of the sugar, India's sugar production is expected to increase by 5.2 million tonnes to 24.2 million in 2011-121 season (October to September), from 19 million tonnes in 2010-11. As per the industry data, mills have produced around 24 million tonnes of sugar till 15 June of the 2010-12 season.

The S&P CNX Nifty is currently trading at 5,637.45, lower by 9.95 points or 0.18% after trading as high as 5,705.80 and as low as 5,627.05. There were 25 stocks advancing against 25 declines on the index.

The top gainers of the Nifty were DLF up by 4.02%, CAIRN up by 3.74%, IDFC up by 2.93%, Hindalco up by 2.83% and GAIL up by 1.81%.

Bharti Airtel down by 3.06%, Ambuja Cement down by 2.28%, Reliance down by 2.28%, Maruti down by 2.13% and Ranbaxy down 1.97% were the major losers on the index.

Asian markets are exhibiting positive trends as Hang Seng soared 1.53%, Jakarta Composite jumped 1.49%, Nikkei 225 added 0.53%, Straits Times increased 0.52%, Seoul Composite surged 1.19% and Taiwan Weighted soared 1.01%.

On the flipside, Shanghai Composite eased 0.02% and KLSE Composite slipped 0.03%.

The European markets have opened on a flat note as France's CAC 40 eased 0.11%, Germany's DAX shed 0.03% and London's FTSE rose 0.07%.

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