UPTREND RESUMED

Positive trade continues in the market amid some volatility, after coming off from the high point of the day. The Nifty was inching up towards the 5,400 mark, while Sensex holding 17,700 levels. Investors were tracking positive cues from Asian markets and picking up blue chip stocks from across various sectors. On sectoral front, all sectors were trading in green. Realty, information technology, oil, power and consumer durables stocks were among the prominent gainers. Meanwhile, Bharti Airtel retained its top position in the selling list, falling 5.4% post dismal performance in its bottom-line. On the global front, Asian bourses continued trading in green supported by hopes that Greece may soon agree to austerity steps needed to secure a second bailout. Back home, the market breadth favoring the positive trend; there were 1,662 shares on the gaining side against 840 shares on the losing side while 96 shares remained unchanged.

The BSE Sensex is currently trading at 17,740.86, surged by 118.41 points or 0.67%. The index has touched a high and a low of 17,784.51 and 17,631.69 respectively. There were 24 stocks advancing against 6 declining ones on the index.

The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 1.21% and 1.30% respectively.

Although buying was witnessed across the board, however, the top gaining sectoral indices on the BSE were Realty up by 2.72%, Metal up by 2.23%, IT up by 1.72%, Power up by 1.64% and CD up by 1.64%. There were no losers on the BSE sectoral space.

The top gainers on the Sensex were Jindal Steel up by 3.84%, Hindalo Industries up by 2.90%, DLF up by 2.65%, Maruti Suzuki up by 2.28% and Wipro up by 2.25%.

On the flip side, Bharti Airtel down by 5.53%, ICICI Bank down by 1.32%, ONGC down by 1.12%, ITC down by 0.66% and M&M down by 0.09% were the top losers on the Sensex.

Meanwhile, in a decision that is likely to benefit the rice farmers and sugar millers, an Empowered Group of Ministers (EGoM) chaired by Finance Minister Pranab Mukherjee has decided to allow the export of more sugar and non-basmati rice, and lowered the floor price of basmati rice exports to boost farm trade. These decisions were taken recently by the EGoM, which met to take cognizance of the issues put forth by the farm sector.

The EGoM has decided to increase the limit on sugar exports by 1 million tones. Sugar manufacturers have been demanding that they be allowed to export additional quantities of sugar given the expected increase in production this year. According to the Indian Sugar Mills Association (ISMA), sugar production is likely to be 26 million tonnes in 2011-12, while the annual domestic consumption is 22 million tonnes. Given the excess production, it was demanded that permission to export greater amounts of sugar be granted.

India is the largest consumer and the second largest producer of sugar in the world had exported 2.6 million tonnes in 2010-11 marketing year. The ISMA is of the belief that one million tonne of sugar export will help the sugar mills realize an additional Rs 3,000 crore, which would help them to pay farmers at a time when crushing is in full swing. In a bumper cane season, sugar millers are already reeling under the impact of high cane prices as liquidity pressures build-up prompting them to default on payments to farmers.

The EoM has further decided to decrease the minimum export price (MEP) of basmati rice by 22%, from $900 a tonne to $700 a tonne. Rice exporters have been demanding a lower MEP to compete against chief rival Pakistan, which does not impose any floor price. The prices of basmati, over the past one year, had crashed from an average of $1100 a tonne to around $650 a tonne, triggering a demand from exporters to abolish the MEP. The MEP was introduced a couple of years ago to ensure that non-basmati is not exported as basmati. With the lowering of MEP they shall be able to export 2.5 million tonnes of basmati.

In another significant decision, it was decided to raise the limit on non-basmati rice exports from 2.2 million tonnes to 4 million tonnes. The EGoM also allowed non-basmati rice export to Bangladesh through land route. At present, India exports rice to Bangladesh only through selected ports. The decision is likely to make export to Bangladesh for the eastern states like Bihar and West Bengal much easier through several export points on the borders. The EGoM decision comes at a time when West Bengal government is finding it difficult to procure rice and the farmers are reeling under distress sale of rice. The distress sale of rice in Bengal has also led to a major political row in the state.

However, the panel did not approve further reduction of onion MEP. Instead, it has decided to set up an Inter-Ministerial Group (IMG) to review the situation. The MEP for onion is currently at $150 a tonne for common varieties.

The S&P CNX Nifty is currently trading at 5,372.75, higher by 37.60 points or 0.70%. The index has touched a high and a low of 5,388.70 and 5,335.75 respectively. There were 41 stocks advancing against 8 declines and one remained unchanged on the index.

The top gainers of the Nifty were Jindal Steel up by 21.75%, Reliance Infra up by 3.67%, Sesa Goa up by 3.54%, Hindalco up by 2.86% and DLF up by 2.67%.

Bharti Airtel down by 5.39%, ICICI Bank down by 1.32%, ONGC down by 0.96%, Dr Reddy down by 0.82% and ITC down by 0.71%, were the major losers on the index.

All the Asian equity indices continued to trade in green; Shanghai Composite was up by 2.09%, Hang Seng was up by 1.27%, Jakarta Composite was up by 0.36%, Nikkei 225 was up by 1.10%, Straits Times was up by 0.79%, Seoul Composite was up by 1.12% and Taiwan Weighted was up by 2.11%.