BARGAIN HUNTING

After eight straight days of fall which was the longest losing streak in nine years, the markets are witnessing some buying coming in as investor hunt for quality stocks after the fall. While the high fuel and commodity prices is likely to keep India's troublesome inflation levels elevated, investors worry that steep valuations and possible slowdown of the economy could squeeze corporate earnings. The world's second-fastest growing major economy will find it 'tough' to grow at 9 percent in the current fiscal year if crude prices remain high, Kaushik Basu, the finance ministry's chief economic adviser reported.On the BSE sectoral front, Oil & Gas, Consumer Durables, Auto, Capital Goods, PSU and Metals are trying to lift the market. However, stocks from FMCG, Health Care, Realty, Power, Teck, IT and Bankex continue to drag the markets down. Both the benchmark indices, i.e. Sensex on Bombay Stock Exchange (BSE) and Nifty--on NSE were trading below their physiological level of 18500 and 5550 respectively. Meanwhile, broader indices continued trading in green and were up by 0.30% (BSE Midcap Index) and 0.46%( BSE Smallcap Index) respectively. The overall market breadth on BSE was in the favour of advances with advance-decline in the ratio of 1265:862, while 84 shares remained unchanged.Meanwhile the Asian counterparts continue trading mostly in the negative terrain at this point of time.

The BSE Sensex is currently trading at 18,500.26, up by 30.90 points or 0.17%. The index has touched a high and low of 18,569.21 and 18,414.69 respectively. There were 15 stocks advancing against 15 declines on the index.

The top gaining sectoral indices on the BSE were, Oil & Gas up 1.06%, Consumer Durables up 0.85%, Auto up 0.73%, Capital Goods up 0.53% and PSU up 0.37%.

While, FMCG down 0.62%, Health Care down 0.51%, Realty down 0.44%, Power down 0.42% and Teck down 0.29% were the major losers on the index.

The top gainers on the Sensex were Hero Honda up by 4.13%, ONGC up 1.60%, JP Associates up 1.28%, Jindal Steel up by 1.24% and RIL up by 1.17%.

On the flip side, Reliance Infra down by 2.93%, Bajaj Auto down by 1.21%, Cipla down by 1.21%, HUL down by 0.95% and Sterlite Industries down by 0.91% were the top losers on the index.

Meanwhile, in a plan to incentivize processing of the entire 810LT  available cane, the Maharashtra State Cabinet is planning to consider a proposal to grant sops for  sugar mills a cane transport subsidy of Rs 3 per tonne for every one-km distance to enable mills to crush the entire cane lying in growers' fields. Currently, this subsidy -effective since March 16 which is available only on cane transported beyond 50 km. That means even if cane is sourced from a distance of 10 km, mills can claim a refund of Rs 30 per tonne.

The above proposal has considered to compensate mills for reduced sugar recovery rates on account of undertaking crushing during May and June. Any cane that is crushed during May 1-15 will be entitled to a subsidy of Rs 65 per tonne, with these rates rising to Rs 130 per tonne for crushing during May 16-31, Rs 195 per tonne during June 1-15 and Rs 260 per tonne for beyond June 15 2011.

If this happens, Maharashtra would produce a record 91.50 LT of sugar, taking an average recovery of 11.3%. Presently, Mills in the State had crushed 756.24 LT of cane and produced 85.66 LT of sugar at an average recovery of 11.33 per cent. During the corresponding period of the 2009-10 seasons, crushing amounted to just 590.53 LT, yielding 68.31 LT of sugar at 11.57% recovery. Meanwhile, this time the State had 163 mills undertaking crushing operations, of which 118 are still running. In 2009-10, by this time, 100 out of the 141 factories had already shut down.

The S&P CNX Nifty is currently trading at 5,536.05, down by 1.10 points or 0.02%. The index has touched a high and low of 5,560.30 and 5,520.20 respectively. There were 17 stocks advancing against 33 declining ones on the index.

The top gainers of the Nifty were Hero Honda up by 4.27%, Maruti up by 1.68%, IDFC up by 1.48%, ONGC up by 1.45% and GAIL up by 1.44%.

Ambuja Cement down by 3.59%, Ranbaxy down by 3.43%, ACC down by 3.16%, Reliance Infra down by 2.89% and PNB down by 2.41% were the major losers on the index.

All the Asian markets were trading in the red baring Taiwan Weighted; Jakarta Composite declined 0.29%, KLSE Composite lost 0.20%, Straits Times dropped 0.07%, Seoul Composite plunged 0.91%, Shanghai Composite down 0.16%, Hang Seng down 0.12%.

On the flip side Taiwan Weighted advanced 0.87%