SENTIMENTS STILL BEARISH

After witnessing butchery in previous session, sentiments continued to remain bearish on Wednesday's morning trade as market participants chose to remain on side lines following RBI's weak outlook on rate cuts amid a subdued trend on global bourses. Global cues deteriorated after the prime ministerial candidate in Greece rejected the bailout, which has renewed concerns about the two-year European debt crisis. Markets in Asia traded with deep cuts, with Japan's Nikkei and Chinese Shanghai leading the declines. Back home, trade remained choppy after Reserve Bank of India (RBI) Deputy Governor Subir Gokarn commented that there is little room for further reduction in interest rates in view of inflationary pressure, triggering selling pressure by participants. On the sectoral front fast moving consumer goods, capital goods and software remained the few gainers while, metal, realty and oil and gas witnessed the most selling pressure, dragging down the Sensex. However, the broader indices were trading in the green while, the market breadth on the BSE was negative; there were 677 shares on the gaining side against 712 shares on the losing side while 63 shares remained unchanged. Meanwhile, Tribhovandas Bhimji Zaveri, the new listing today got poor response from the investors and the scrip is trading with a cut of about 6 percent.

The BSE Sensex opened at 16,436.41; about 110 points lower compared to its previous closing of 16,546.18, and has touched a high of 16,542.40 while low remained its opening.

The index is currently trading at 16,532.56 down by 13.62 points or 0.08%. There were 7 stocks advancing against 23 declines on the index.

The overall market breadth has made a negative start with 46.63% stocks advancing against 49.04% declines. The broader indices, however, were trading in the green; the BSE Mid cap and Small cap indices rose 0.12% and 0.02% respectively.

The few gaining sectoral indices on the BSE were, FMCG up by 0.82%, CG up by 0.16%, IT up by 0.16% and TECk was up by 0.04%. While, Metal down by 0.75%, Realty down by 0.70%, Oil and Gas down by 0.68%, PSU down by 0.40% and Auto down by 0.37% were the top losers on the index.

The top gainers on the Sensex were ITC up by 3.23%, TCS up by 1.87%, BHEL up by 1.02%, L&T up by 0.81% and Wipro up by 0.71%.

On the flip side, Hindalco was down by 1.70%, Cipla was down by 1.65%, Bharti Airtel was down by 1.46%, Coal India was down by 1.39% and GAIL was down by 1.39% were the top losers on the Sensex.

Meanwhile, with payment mechanism issues being resolved, sanction hit Iran is keen to enhance trade with India especially with import of agricultural commodities like wheat, rice, tea and sugar, as per the Federation of Indian Export Organisations (FIEO). Pharmaceutical is the other area which is under consideration. India and Iran are looking at increasing the bilateral trade to $25 billion in the next four years from the current level of $15 billion.

A 56-member Iranian trade delegation is currently in India to discuss ways and means to increase trade with the country. It is also expected that exports to Iran will help reduce the trade deficit of the country which currently stands at an all time high of $185 billion.

The exporters body is also keen that the government helps it to increase trade with countries like China and Africa which it believes are still untapped markets. It is of the opinion that prices of manufacturing as well as wages are increasing in China which is making their commodities expensive. Indian commodities are now in a position to effectively compete with them in the global market.

FIEO is also of the view that the Reserve Bank should also be asked to intervene to provide more affordable credit to exporters. It has further observed that efforts to diversify markets and reduce dependence on US and Europe are yielding results. Asia and ASEAN region which accounted for about 35% of India's exports are now accounting for about 50% of the share.

The S&P CNX Nifty opened at 4,967.90; about 33 points lower compared to its previous closing of 4,999.95, and has touched a high and a low of 4,998.00 and 4,959.65 respectively.

The index is currently trading at 4,991.20, lower by 8.75 points or 0.18%. There were 13 stocks advancing against 37 declines on the index.

The top gainers of the Nifty were ITC up by 3.50%, TCS up by 1.77%, BPCL up by 1.40%, BHEL up by 1.28% and L&T up by 0.93%.

On the flip side, Hindalco down by 2.25%, Kotak Bank down by 1.90%, SAIL down by 1.82%, Ambuja Cement down by 1.76% and DLF down by 1.76%, were the major losers on the index.

All the Asian equities were exhibiting the choppy trade; Shanghai Composite was down 32.60 points or 1.33% to 2,416.28, Hang Seng was down 192.72 points or 0.94% to 20,292.03, Jakarta Composite was down 56.00 points or 1.34% to 4,125.08, KLSE Composite was down 2.82 points or 0.18% to 1,587.78, Nikkei 225 was down 149.31 points or 1.63% to 9,032.34, Straits Times was down 20.33 points or 0.69% to 2,911.65, KOSPI Composite was down 21.34 points or 1.08% to 1,945.67 and Taiwan Weighted was down by 78.81 points or 1.04% to 7,466.90.