TIGHT RANGE

Barometer gauges oscillating in a tight band are sustaining their gains as the sentiment continues to remain firm in the backdrop of strong global cues. Short covering that has emerged at lower levels, has also contributed to the up move of the bourses, which stagnating at the start of the week, raised doubts over the fundamentals of the markets in the week marked by March month's F&O expiry.

Buoyed by the cheer across the globe post Federal Reserve chief Ben Bernanke suggested he thinks more needs to be done to help spur the US economy, bears ran berserk to capture gains, which drove the benchmark indices higher above the 17100 level (Sensex) and 5200 (Nifty) respectively.  Much of the strength came in from the trade of Asian pacific shares, which imitating overnight rally of Wall Street stood tall in trade. Asian shares rose the most in six weeks after Federal Reserve Chairman Ben S. Bernanke signaled he will continue to stimulate the U.S. economy. Meanwhile, the US future indices were showing an uptick in the screen trade.

Back home, sugar stocks like Shree Renuka Sugars, Sakthi Sugars, Bajaj Hindusthan, Dhampur Sugar Mills and Balrampur Chini Mills, rallied on the bourses after the government decided to allow the export of another 1 MT of sugar export under the Open general license (OGL) in view of surplus production. However, Auto stocks lost all their steam after Maharashtra government raised motor vehicle tax; Maruti Suzuki plunged 2.7% while Tata Motors, M&M and Bajaj Auto were down by around 0.5%. Stocks from Consumer Durable, Realty and Fast Moving Consumer Goods (FMCG) counters on the BSE sectoral front, were one among the prominent gainers, however, stocks from Power, Oil & Gas and Public Sector Undertaking showcase reversed trend. The broader indices too depicted lackluster trend. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1121:1031, while 128 shares remained unchanged.

The BSE Sensex is currently trading at 17,141.30, up by 88.52 points or 0.52%. The index has touched a high and a low of 17,230.34 and 17,061.16 respectively.   There were 19 stocks advancing against 11 declining one's on the index.

The broader indices were trading flat; the BSE Mid cap index was up by 0.03% and Small cap indices was down by 0.01%.

The top gaining sectoral indices on the BSE were, CD up by 2.04%, Realty up by 1.26%, FMCG up by 1.20%, TECk up by 1.08% and IT up by 0.96%. While, Power down by 0.16%, Oil and Gas down by 0.15% and PSU down by 0.09% remained the only losers on the index.

The top gainers on the Sensex were HUL up by 2.83%, Sterlite Industries up by 2.73%, Cipla up by 2.42%, DLF up by 2.14% and HDFC up by 1.96%.

On the flip side, Maruti Suzuki was down by 2.23%, BHEL down by 1.88%, Jindal Steel down by 0.76%, ICICI Bank down by 0.74% and Tata Power was down by 0.73 % were the top losers on the Sensex.

Meanwhile, the government has allowed exports of additional 1 million tonnes of sugar. The decision to allow exports was taken by an Empowered Group of Ministers (EGoM), headed by Finance Minister Pranab Mukherjee. The decision will also help domestic mills to clear mounting sugarcane arrears to farmers that have reached Rs 8,409 crore. 

India is the second largest producer and the world's largest consumer of sugar. But it is a sector which is highly regulated by the government. The government had allowed 2 million tonnes of sugar exports in the 2011-12 marketing year in two equal tranches, as the country's sugar output was all set to exceed domestic consumption.

Based on the inputs of Cane Commissioners of all sugar producing states, the food ministry recently revised the sugar production estimates upwards to about 25.2 million tonnes from the earlier projection of 24.6 million tonnes for this marketing year.

However, the industry had pegged the sugar output at 26 million tonnes in 2011-12 against 24.3 million tonnes in the previous year. The annual domestic demand is projected at 22 million tonnes. With this decision the total quantity of sugar approved for exports has risen to 3 million tonne, in line with what the industry and markets expected. This could increase the prices of sugar in the domestic market by approximately 1%.

The EGOM has also decided to continue exports of wheat and non-basmati rice, which was allowed under Open General Licence (OGL) in September last year, on record production. The panel has also allowed unrestricted exports of wheat flour under the OGL mechanism for the year starting April 1, 2012, removing a limit of 650,000 tonnes set for the current fiscal year.

The S&P CNX Nifty is currently trading at 5,200.80, higher by 16.55 points or 0.32%. The index has touched a high and a low of 5,246.05 and 5,184.65 respectively.  There were 33 stocks advancing against 16 declining while one stock remained unchanged on the index.

The top gainers of the Nifty were HUL up by 2.54%, Sterlite Industries up by 2.45%, Cipla up by 2.35%, DLF up by 2.03% and HDFC up by 1.90%.

On the flip side, Maruti Suzuki down by 2.62%, BHEL down by 2.01%, ICICI Bank down by 1.26%, Jindal Steel down by 1.16% and JP Associate down by 0.73% were the major losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite gained 0.20%, Hang Seng surged 1.37%, Jakarta Composite added 0.60%, KLSE Composite rose 0.32%, Nikkei 225 spiked up by 2.14%, Straits Times accumulated 0.96%, Seoul Composite was up by 0.86% and Taiwan Weighted registered gains of 0.58%.