NEGATIVE TERRITORY

The benchmark equity indices continue to trade in negative territory in late morning session due to profit booking from funds ahead of corporate results along with worries over inflation. The increase in crude oil prices too continues to be a cause for concern for domestic economy; Brent crude saw a high of $ 122.89/barrel on Tuesday on news of delays in Forty crude cargoes. It was still trading at $121.8 a barrel in early trade today. Meanwhile, the other Asian markets were trading mixed and US index futures were trading flat with modest gains, central banks in the US and Europe are now contemplating an exit from stimulus. Back home, NSE Nifty and BSE Sensex were trading below their psychological level of 5,900 and 19,700 respectively. The BSE sectoral indices were trading mixed Realty, Consumer Durables (CD) , Power , Auto and Metal  counters were witnessing  some buying  from investors  while, FMCG ,TECk , IT, Banking shares saw profit booking. While the broader indices continue to outperform; the BSE Mid cap and Small cap indices surged 0.49% and 0.68% respectively. The overall market breadth remains in the favour of advances which has outnumbered declines in the ratio of 1492:1064, while, 86 shares remained unchanged

The BSE Sensex declined 47.30 points or 0.24% at 19639.52. The index has touched a high of 19,811.14 and a low of 19,550.55 respectively.

The BSE Mid cap and Small cap indices surged 0.49% and 0.68% respectively. 

The top gaining sectoral indices on the BSE were, Realty up 1.65%, Consumer Durables (CD) up 1.02%, Power up 0.44%, Auto up by 0.75% and Metal up 0.30%. While, FMCG down 0.64%,TECk down 0.17%, IT down 0.41% and Bankex down 0.30% were the only losers on the index.

The top gainers on the Sensex were Reliance Infra up 2.46%, Hero honda up 0.84%, Tata Power up 0.73%, Sterlite Inds up 0.70% and Tata Motots up 0.64%.

Wipro down 1.70%,ITC down 1.30%,Bharti Airtel down 1.29% and Reliance Communication  down by 1.11%  and HDFC Bank down  1.07% were the major losers on the index.

In a significant positive development for miners, the Indian Supreme Court (SC) on Tuesday lifted the ban on export of iron ore imposed by the government of Karnataka state. The state accounts for nearly a quarter of India's iron ore exports but had banned shipments of iron ore from its 10 ports and stopped its transport to other states for exports in July last year.

The relief however, is not permanent for now. The court said its order that lifted the ban from 20 April was an interim one and listed the case for further hearing in the first week of May. Meanwhile the Karnataka government has been given two weeks to implement some new mechanism to prevent illegal mining while allowing legitimate exporters to continue shipping the commodity out of the country.

The ban was imposed by the state due to widespread illegal mining of the crucial raw material. However, after the mining companies in Karnataka state moved the Karnataka high court and later to the Supreme Court challenging the constitutional validity of the government's move last year, the SC directed Karnataka government to put in place an alternative mechanism to prevent illegal mining.

However, traders are saying that iron ore prices in the country have not reacted much immediately as the market would wait for more clarity on the case. Also, the demand from China is not clear yet and it is going to be a 'wait and watch' policy for exporters for some time. One thing that the stay order does accomplish is preventing further slump in prices by preventing the steel companies to act as monopolist (monopolist buyer) for iron ore shippers.

Iron ore prices have come down significantly in recent weeks in China, biggest buyer of Indian iron ore, following apprehension of slowdown in demand because of the double natural calamity in Japan and the following nuclear crisis that is still continuing. Japan is second largest steel maker in world after China and decline in production there can have substantial impact on demand and hence prices of iron ore. Declining prices in China, coupled with the four fold increase in export duty on iron ore fines implemented in FY12 Budget by Indian government have been bringing iron ore prices down. The latest stay order by SC however is now expected to halt the declining trend in iron ore prices.

The S&P CNX Nifty trimmed 18.55 points or 0.31% at 5,891.50 .The index has touched a high of 5,944.45 and a low of 5,868.80 respectively.

The top gainers of the Nifty were Sesa Goa up by 3.42%, BPCL up by 2.75%, Reliance Infra up by 2.19%, GAIL up 1.53% and IDFC up by 1.35%.

The top losers of the index were Wipro down 1.88%, Bharti Airtel down 1.43%, Ambuja Cements down 1.35%, Reliance Communication down 1.25% and ITC down 1.22%.

The other Asian markets were trading mixed; Shanghai Composite gained 1.20%, Hang Seng added 0.59%, Jakarta Composite rose 0.26%, Straits Times advanced  0.27%, and Taiwan Weighted surged 1.69%. On the other hand, KLSE Composite trimmed 0.10%, Nikkei 225 decreased 0.32% and Seoul Composite shed by 0.171%.