MARKETS EDGE HIGHER

After getting a subdued start, benchmark equity indices are currently oscillating into the positive territory with a tight band as market men are finicky to invest in risky asset class ahead of the outcome of UP Assembly election today. The results, expected by noon, would give clues on the Congress-led coalition's ability to push through stalled reforms to boost flagging growth in Asia's third-largest economy. Going by the trends the SP is well on its way to emerge as the single largest party, however, the Bharatiya Janata Party (BJP) and the Bahujan Samaj Party (BSP) together pose a tough challenge for it.

Meanwhile, market sentiment in early deals were also dented by weaker regional markets, as slowing economies in China and Europe and tension over Iran triggered profit booking. Asian stocks fell, heading for the first two-day decline since January, after data from the U.S. and Europe signaled slowing economic growth. U.S. factory orders decreased for the first time in three months and euro-area services output shrank more than forecast in February, economic reports showed yesterday. The US future indices too were downtick in the screen trade.

Back home, on the BSE sectoral front, stocks from Realty, Consumer Durable and Capital Goods counters had reversed the sentiment, however, stocks from Oil & Gas and Metal counters, limited the upside of the bourses. Meanwhile, sugar stocks gained additional traction as UP is the biggest manufacturer of sugar cane in India. Ahead of the polls, the Mayawati government in UP raised sugar prices to Rs 250 per quintal from Rs 210 per quintal despite a significantly high sugar cane production in 2011-12. The state-administered prices or SAP play a significant role as sugar producers are expected to pay that price to farmers to procure sugar. Reacting to this, Bajaj Hindusthan shares rose 0.4 per cent while Dhampur Sugar gained 1.4 per cent. Oudh Sugar too rose 2 per cent.

Thus, the 30 share index of BSE-Sensex- after starting around 17300 level, is currently gyrating above the 17400 psychological level, with a gain of 100 points. Similarly, 50 share index of National Stock Exchange (NSE)-was trading above the 5300 level. The broader indices too were trading in line with the benchmark indices. The overall market breadth on BSE was in support of advances which thumped declines in the ratio of 1204:804, while 70 shares remained unchanged.

The BSE Sensex is currently trading at 17,467.17, up by 104.30 points or 0.60%. The index has touched a high and low of 17,535.36 and 17,185.24 respectively.  There were 23 stocks advancing against 7 declines on the index.

The broader indices were trading in line with the front liners; the BSE Mid cap and Small cap indices rose 0.61% and 0.45% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 1.84%, Consumer Durable (CD) up by 1.65%, CG up by 1.19%, Public Sector Undertaking (PSU) up by 1.08% and Auto up by 1.07%. While, Oil and Gas and Metal, down by 0.15% and 0.11% respectively remained the losers on the index.

The top gainers on the Sensex were DLF up by 2.86%, BHEL up by 2.63%, SBI up by 2.08%, Coal India up by 1.80% and Mahindra & Mahindra up by 1.59%.

On the flip side, Hindalco Industries down by 2.47%, Gail India down by 0.89%, Sterlite Industries down by 0.87%, Reliance Industries down by 0.74% and Cipla down by 0.69% remained the top losers on the Sensex.

Meanwhile, the Indian government has banned any further exports of cotton with immediate effect, including orders that have been placed but not yet shipped. The move is likely to push up global prices of cotton as India is the second largest producer of cotton in the world, and bring down domestic prices.

The move has come in all probability with the view to reduce exports which have surpassed government estimates for the month of January fuelling fears of low domestic supply. India had already exported 8.5 million bales, higher than government estimates made in January of 8.4 million bales of 170 kilograms each for the year, due to strong demand from China which has accounted for 80% of cotton exports so far. China is the largest market for cotton exports followed by Pakistan, Bangladesh and Thailand.

However, Indian exporters are not happy with the decision and have stated that the ban could permanently damage India's reputation in the international market and also bring down domestic prices to support prices very fast.

Cotton production in India was estimated to touch record levels of 35.6 million bales in 2011-12, up from 33.9 million bales last year. However the estimates were revised downwards to 34.5 million bales in September 2011. Supply of cotton in local markets is still lower than expected which could have probably led to the ban on its exports.

The S&P CNX Nifty is currently trading at 5,312.50, higher by 32.15 points or 0.61%. The index has touched a high and a low of 5,336.10 and 5,222.70 respectively.  There were 37 stocks advancing against 13 declines on the index.

The top gainers of the Nifty were BHEL up by 3.51%, DLF up by 3.10%, Siemens up by 2.39%, Axis Bank up by 2.20% and Coal India up by 2.12%.

On the flip side, Hindalco down by 2.43%, Ambuja Cement down by 1.26%, ACC up by 1.05%, Sterlite Industries up by 0.95% and Gail India down by 0.88% remained the top losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite plunged by 1.13%, Hang Seng slid 1.60%, Jakarta Composite declined by 0.71%, KLSE Composite shed 0.52%, Nikkei 225 lost 0.95%, Straits Times plummeted by 1.27%, Seoul Composite plunged by 1.35% and Taiwan Weighted was down by1.21%.