MARKETS COME OFF THEIR HIGHS

Increased buying by funds and retail investors sparked off by a firming trend on other Asian bourses mirroring the overnight gains in the U.S. market on the back of strong quarterly earnings posted by IBM and Apple, mainly led to the early spurt on the Dalal Street. However, local bourses have worn out some of its gains owing to the drag of the Index heavyweights such as Reliance Industries, Infosys, ICICI Bank and most importantly Wipro. India's No. 3 software services exporter- Wipro- got beaten down cruelly despite reporting numbers in line with the street expectation. However, the company's numbers that came in lower than its peers, became the reason of its drag, the stocks of the company were trading down with a cut of over 2%. On Consolidated basis, the Group's net profit has registered a gain of 1.24% at Rs 1334.90 crore for the quarter ended June 30, 2011 as compared to Rs 1318.60 crore for the quarter ended June 30, 2010.
On the global front, US stocks posted their best day since March on Tuesday after strong corporate results and as renewed hope for an agreement on thorny budget issues boosted investor confidence, thereby leading to an up move. Meanwhile, Asian markets rose on Wednesday boosted by the indications of progress on a US budget-reduction deal coupled with healthy earnings reports from U.S. companies. Investors took heart after big U.S. companies such as Coca-Cola Co., IBM and Apple reported better quarterly earnings. The US future indices too were showing an uptick on the screen trade.
Back home, stocks of Crompton Greaves which trading lower with a cut of above 10% too spooked the sentiment. The company has beaten down even since reporting Q1 numbers. On consolidated basis, the Group's net profit fell by 58.36% at Rs 79.47 crore for the quarter ended June 30, 2011 as compared to Rs 190.85 crore for the quarter ended June 30, 2010. Meanwhile, stocks from Information Technology, Power and TECk counters too were weighing on the sentiment. However, the stocks from FMCG, Realty and CD space were the ones that held on to their ground. The 30 scrip sensitive index gaining over 30 points was trading above the 18650 mark, similarly the 50 share index too was trading above the 5600 level. The broader indices being no different were showcasing trend similar to their larger peers. The overall market breath on BSE was in the favour of advances which have smashed declines in the ratio of 1422:1097, while 127 shares remained unchanged.
The BSE Sensex is currently trading at 18,691.21, up by 37.34 points or 0.20%. The index has touched a high and low of 18,765.60 and 18,682.61 respectively. There were 18 stocks advancing against just 12 declines on the index.
The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.23% and 0.65% respectively.
The top gaining sectoral indices on the BSE were, FMCG up by 0.88%, Realty up by 0.60%, CD up by 0.46%, Oil & Gas up by 0.38% and Bankex up by 0.32%. While, IT down by 0.58%, Power down by 0.50%, TECk down by 0.43%, HC down by 0.24% and CG down by 0.16% were the only losers on the index.
The top gainers on the Sensex were DLF up by 1.54%, RCom up by 1.31%, ITC up by 1.18%, Reliance Infra up by 1.06% and Maruti Suzuki was up by 0.87%.
On the flip side, Wipro was down by 2.90%, Hindalco Industries was down by 1.57%, Hero Honda down by 0.89%, TCS down by 0.79% and Cipla down by 0.55% were the top losers on the Sensex.
Meanwhile, the agriculture production of India showed record increase of around 11% during the 2010-11 agriculture season (July to June), the farm production increased from 218 million tonne in 2009-10 to 242 million in 2010-11. Foodgrains include, rice, wheat coarse cereals and pulses. In 2009-10 season, the farm production had reduced by almost 7% to 218 million tonne from 234 million tonne in 2008-09.
However, sustaining the record output may be difficult this year because of the poor rainfall in July may affect sowing and eventually the output. In Mid-July, India received 3% below the normal rainfall with 13 meteorological departments reporting deficit in rainfall.  The 11% growth in agriculture production is due to increase in production of wheat, coarse cereals, maize and pulses. The production of wheat was 86 million during 2010-11 from 81 million tonne in 2009-10, similarly, production of coarse cereals was 42.22 million tonnes, production of maize was 21.28 million tonnes, and production of pulses was 18.09 million tonne. Experts say that this record increase in farm production is due to central government's policies. The production of wheat, coarse cereals, maize and pulses hit the all time high level.
Agriculture Secretary P K Basu said, 'We can easily produce 20 million tonnes of pulses by bringing follow land under cultivation and also through inter-cropping system...I do not think we have to import pulses after 3-4 years.' 
From the last few years government has increased the Minimum Support Prices for number of crops, which has allowed famers to apply more inputs to their crops, which resulted in increase in the overall production. Government had increased MSP for pulses up to Rs 700 per quintal. For some pulses the support price is increased by more than 20%.  The record increase in production of vegetable oilseeds also helped to reduce the import of vegetable oils about a million tonne. Last year country had imported around 9.2 million tonne of vegetable oils to meet the domestic demand.
Experts argue that government should allow exports of foodgains so that farmer gets the higher prices. Earlier in this month, government removed the ban from exports of non basmati rice and wheat. Country had the stock of 64 million tonne of food grain which is above the shortage capacity. However, the decision on removing ban from exports of food grains had hampered the possibility of making higher profits in international markets. 
Presently, India is in position to meet the domestic demand for the foodgrains, however, it has to increase the farm production to meet the future demand for foodgrains which is expected to be around 280 million tonne by 2020. The per capita consumption of cereals has declined; however, increase in population will require increase in production in absolute terms.
 The S&P CNX Nifty opened at 5,642.05; about 29 points higher compared to its previous closing of 5,613.55, and has touched a high and a low of 5,645.40 and 5,624.40 respectively.
The index is currently trading at 5624.10, higher by 10.55 points or 0.19%. The index has touched a high and low of 5,645.40 and 5,621.10 respectively. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were DLF up by 1.71%, RCom up by 1.26%, ITC up by 1.20%, Reliance Capital up by 1.08% and Siemens up by 1.07%.

On the flip side, Wipro down by 2.94%, Hindalco down by 1.57%, HCL Technologies down by 0.85%, TCS down by 0.80% and Cairn India down by 0.73%, were the major losers on the index.
All the Asian equity indices barring Shanghai Composite were trading in the green; Hang Seng gained 0.10%, Jakarta Composite rose 0.09%, KLSE Composite added 0.46%, Nikkei 225 surged 1.08%, Straits Times gathered 0.53%, Seoul Composite surged 1.09% and Taiwan Weighted spurted by 2.04%.
On the flip side, Shanghai Composite was down by 11.36 points or 0.41% to 2,785.62.