MARKETS TRADE LOWER

Sentiments turned bearish on Friday's morning as market participants chose to take some profits off the table after last two sessions of gains amid a mixed trend at Asian counters. Though, the US markets continued their gaining streak overnight and the S&P reached to its highest level since early May on the back of strong earnings and outlook from technology companies, which overshadowed weak economic data of rise in unemployment benefit claims. Back home, the rupee fell tracking weaker regional currencies, after the euro fell against the dollar undermined by worries about Spain's fiscal woes and recent fall in shorter-term euro zone interest rates. On the sectoral front auto, public sector undertaking and fast moving consumer goods remained the few gainers while, banking, realty and oil and gas witnessed the selling pressure most, dragging down the markets. Meanwhile, Maruti Suzuki slipped over 2 percent in early trade as strike at the company's Manesar plant continues for second day in a row. The factory has the capacity to produce 5 lakh cars a year and accounts for about a third of Maruti's total output. Moreover, the broader indices were trading marginally in the green, while the market breadth on the BSE was negative; there were 718 shares on the gaining side against 749 shares on the losing side while 65 shares remained unchanged. Bucking the trend, shares of power equipment makers such as Bharat Heavy Electricals, Larsen and Toubro, Crompton Greaves, BGR Energy, Alstom India and Thermax were up 1-2% after the cabinet cleared new duty structure for import of power equipment.

The BSE Sensex opened at 17,275.20; about 3 points lower compared to its previous closing of 17,278.85, and has touched a low of 17,222.98 while high remained its opening.

The index is currently trading at 17,235.26 down by 43.59 points or 0.25%. There were 10 stocks advancing against 20 declines on the index.

The overall market breadth has made a negative start with 46.87% stocks advancing against 48.89% declines. The broader indices, however, were trading marginally in the green; the BSE Mid cap and Small cap indices were up by 0.04% and 0.08% respectively.

The few gaining sectoral indices on the BSE were, Auto up by 0.25%, PSU up by 0.16% and FMCG up by 0.10%. While, Bankex down by 0.59%, Realty down by 0.52%, Oil and Gas down by 0.45%, HC down by 0.24% and IT down by 0.21% were the top losers on the index.

The top gainers on the Sensex were Maruti Suzuki up by 1.67%, Bajaj Auto up by 1.41%, TCS up by 1.23%, Coal India up by 0.89% and BHEL was up by 0.58%.

On the flip side, Dr Reddy was down by 1.99%, Sterlite Industries was down by 1.09%, Infosys was down by 0.97%, Tata Power was down by 0.94% and HDFC Bank down by 0.70% were the top losers on the Sensex.

Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) is mulling a proposal to hike the sugarcane prices, which the mills are required to pay to farmers by 17% to Rs 170 per quintal for 2012-13 marketing year (October-September) period. CCEA will be taking the decision on it pursuant to Food Ministry accepting CACP's recommendation for the same.

The Government receives advice from a statutory body the Commission for Agricultural Costs and Prices (CACP) on farm pricing policy front. For the 2012-13 marketing year, CACP has recommended a 17.25% hike in the FRP on account of rising input production costs. The CCEA in its meeting scheduled is considering of increasing Fair and Remunerative Price (FRP) of sugarcane for 2012-13. The Government by and large accepts the cane price recommended by the CACP. The FRP is the minimum price that sugarcane farmers are legally guaranteed and for the ongoing marketing year it stands at Rs 145 per quintal. The FRP is the sugarcane price fixed by the Centre however some states like Uttar Pradesh and Tamil Nadu follow the policy of state advisory price (SAP), where they declare their own rate.

However, the SAP is higher than the FRP. In Uttar Pradesh, compared to Centre's FRP of Rs 145 a quintal the SAP for the current year stands at Rs 250 per quintal. The FRP is linked to a basic recovery rate of 9.5%, subject to a premium of Rs 1.46 for every 0.1% point increase in recovery above 9.5%. The recovery rate is the quantity of sugar that is produced from the crushed cane.

Due to bumper production of sugarcane, India, the world's second largest sugar producer, is currently exporting the sweetener which stood at 357.66 million tonnes in 2011-12.

The S&P CNX Nifty opened at 5,233.55; about 9 points lower compared to its previous closing of 5,242.70, and has touched a high and a low of 5,238.70 and 5,224.05 respectively.

The index is currently trading at 5,229.95, lower by 12.75 points or 0.24%. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Maruti Suzuki up by 1.69%, Bajaj Auto up by 1.64%, Asian Paints up by 1.45%, TCS up by 1.25% and Coal India up by 0.82%.

On the flip side, Kotak Bank down by 2.23%, Dr Reddy down by 2.03%, Sterlite Industries down by 1.23%, Tata Power down by 1.04% and Axis Bank down by 1.89%, were the major losers on the index.

Asian equities were exhibiting mixed trade; Shanghai Composite lost 5.97 points or 0.27% to 2,178.87, Nikkei 225 was down by 25.25 points or 0.29% to 8,770.30, Straits Times declined by 8.85 points or 0.29% to 3,019.77, and Taiwan Weighted was down marginally down by 9.03 points or 0.12% to 7,139.76.

On the other hand, Hang Seng added 50.94 points or 0.26% to 19,609.99, Jakarta Composite gained 2.89 points or 0.07% to 4,099.06, KLSE Composite was up by 2.01 points or 0.12% to 1,646.61 and Kospi Composite was up by 1.23 points or 0.07% to 1,824.70.