MARKETS POWER AHEAD

Buoyed by sustained buying from overseas investors and a declining trend in global crude oil prices, domestic equity bourses have maintained their rally for the seventh consecutive day with the BSE Sensex surpassing the 19,300 mark and the NSE Nifty gyrating around its 5800 milestone. For once, the broader markets are keeping pace with their larger peers.  The uptrend can also be attributed to the covering up of pending short positions by speculators ahead of tomorrow's monthly expiry in the derivatives segment. On the global front, Asian stocks tailing the overnight strong performance on Wall Street is trading comfortably in green while Japanese exporters led Tokyo too was up on the back of a weaker yen, but fears over the atomic crisis continued to weigh. The US future indices are showing mixed trend in the screen trade. Back on Dalal Street, on the BSE Sectoral front, bulls have kept their footing firm as all the sectoral indices are confidently trading in green, however, stocks from Consumer Durable, Realty and Healthcare counters are contributing prominent gains. The overall market breadth on BSE was mightily in the favour of advances which thumped declines in the ratio of 1804:497, while, 71 shares remained unchanged. Meanwhile, Shares of PTC India Financial Services were trading at about 10% discount to its issue price on debut.

The BSE Sensex is currently trading at 19,313.79, up by 192.99 points or 1.01%.The index has touched a high of 19,340.93 and a low of 19,178.77 respectively. 29 stocks were advancing against 1 decline on the index.

The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 1.13% and 1.75% respectively. 

All the sectoral indices were trading in green. However, the top gaining sectoral indices on the BSE were, CD up by 2.54%, Realty up by 1.98 %, HC up by 1.39%, Auto up by 1.27% and Metal up by 1.19%.

The top gainers on the Sensex were Cipla up 2.58%, Mahindra & Mahindra (M&M) up 2.55%, DLF up 2.35%, HDFC up by 2.15% and ONGC up by 1.84%.On the other side, Bharti Airtel down by 0.40% was the sole looser on the index.

Meanwhile, Capital controls were a legitimate response to a surge in volatile capital inflows and India's central bank will resort to the same if and when the need arises, said D Subbarao, Governor of the Reserve Bank of India (RBI) on Tuesday, adding that global perception of capital controls as an economic tool had improved.

Subbarao said that there was a broad consensus among most central banks about making capital controls a legitimate component of the policy response to surges in capital flows. While delivering a speech in Colombo on the occasion of the 60th anniversary celebrations of Central Bank of Sri Lanka, the Governor said the multi-speed recovery around the world and the consequent differential exit from accommodative monetary policy have triggered speculative capital flows into emerging market economies (EMEs).

'The most high profile problem thrown up by capital flows, in excess of a country's absorptive capacity, is currency appreciation which erodes export competitiveness,' he said adding that ideally capital inflows to EMEs should be stable on a medium term basis to benefit the host country and also be roughly equal to the economy's absorptive capacity.

He noted that while multilateral institutions like the International Monetary Fund (IMF) used to see capital controls as a form of protectionism, the views of most economists even in the developed world has changed since the financial crisis of 2008. 'The crisis has changed the terms of that debate. It is now broadly accepted that there could be circumstances in which capital controls can be a legitimate component of the policy response to surges in capital flows,' Subbarao said.

India has so far not imposed any capital inflows, but some other countries including Brazil had resorted to such restrictions. Capital controls are generally in form of some Tobin Tax, named after James Tobin, who was first to propose that cross boarder capital movement should attract a small tax to discourage volatile flows. Since India runs a significant current account deficit (CAD) of around 2.5-3% of its gross domestic product (GDP), it has been following a wait and watch policy on inflows so far. 

While there was a surge in capital inflows by middle of the current financial year, off late, foreign funds have been on the sell mode due to concerns including a high inflation and potential slowdown. Recovery in advanced regions has also lead to slowdown in inflows into emerging economies in recent months. Subbarao stressed that there was a need for economists from both developing and rich world to develop consensus on how temporary surge in inflows or outflows should be handled so as to bring more stability in global financial system.

The S&P CNX Nifty is currently trading at 5,792.15, higher by 55.80 points or 0.97%. The index has touched a high of 5,799.15 and a low of 5,753.90 respectively. There were 47 stocks advancing against just 3 declines on the index.

The top gainers of the Nifty were DLF up 2.55 %,M&M up 2.54%, Dr Reddy up by 2.29%, HDFC up 2.14% and Ambuja Cement up 1.98%.

Bharti Airtel down 0.71%, HCL Technologies down 0.38% and Axis Bank was down by 0.36 %, were the only losers on the index.

Hang Seng gained 1.71%, Jakarta Composite added 0.93%, KLSE Composite rose 0.59%, Nikkei 225 surged 1.90%, Straits Times soared 1.28%, Seoul Composite  expanded 1.21% and Taiwan Weighted increased 0.71%.On the flip side, Shanghai Composite down by 0.48% was the lone looser in the Asian pack.

TOP PICKS FOR 30th MARCH

Markets today continued it's northward journey but though the front liners moved up, taking the INDEX up, the mid caps & small caps are yet to catch up. It is expected now that the Index shall consolidate, while the broader markets catch up. the NIFTY may try to move up to 5788 & on the downside may slip to 5633 -5567. Long positions can be taken in DRREDDY for a target of 1667, GMRINFRA for a target of 48, MARUTI for a target of 1328, NTPC for a target of 203, WOCKPHARMA for a target of 365.

                                                   HAPPY INVESTING........... CHEERS !!!

EXHILARATION CONTINUES

Investors' exhilaration is showing no signs of waning any time soon in the Indian stock markets as the joy of closing in the positive territory got sextupled this Tuesday, that too on a day when major stock markets across the globe shriveled by quite a margin. Foreign institutional investors are showing renewed vigor in Indian equities following the wilt in international crude oil prices after Libyan rebels advanced against Gaddafi's troops ahead of the quarterly earnings season as they speculated most of the headwinds have been factored in by the markets and that the companies will report strong earnings for the fourth quarter. While the concerns over inflationary pressure too eased to some extent after fall in crude oil prices thereby supporting local sentiments. The NSE's 50-share broadly followed index Nifty, reclaimed the 5,700 mark, an important psychological level, after surging around a percent while Bombay Stock Exchange's Sensitive Index, Sensex garnered over one hundred fifty points to regain the crucial 19,000 level after almost nine weeks. It largely remained a large cap kind of play in the domestic markets as investors showed little interest in the broader markets given the fact that the BSE's Midcap and Smallcap indices went home with losses of 0.02% and 0.44% respectively. On the sectoral front, rate sensitive Auto pocket managed to cling on to the top gainer's position after garnering 1.53% led by heavyweights like Maruti Suzuki which soared 3.12%, being the top gainer on the index while stocks like Tata Motors and Hero Honda too gained 1.55% and 3.02% respectively ahead of the March month sales numbers which are expected to be reported on Friday. Technology counter too remained amid the thick of things and advanced 1.35% on the back of gains in majors like Bharti Airtel which was up 3.36% and Reliance Communication up 4.18%. PSU oil marketing companies like HPCL, BPCL and IOC spurted between 2-3.50% in the day's trade on the back of factors like wilt in international crude oil prices. Index bellwether Reliance Industries remained highly unstable in the session and it slipped marginally by the end of trade after trading in the positive territory for most part of the day. 

On the global front, majority of Asian equity indices finished on a somber note led by Chinese stocks which declined more than half a percent. Japanese Nikkei edged lower in the trade as country struggled to contain a meltdown at a nuclear power plant and investors remained worried over the crippled nuclear plant and the impact of the natural disaster on corporate earnings. The European markets too traded on a cautious note as France's CAC, Germany's DAX and Britain's FTSE exhibited negative trends. On the other hand, the screen trading for US index futures also indicated that the Dow could open on a flat note.

Earlier on Dalal Street, the benchmark got off to a soft start tracking subdued leads from across Asia where investors remained on the sidelines due to the weakness in overnight US markets which withered despite some good economic reports as traders remained apprehensive over Japan's nuclear crisis and violence in the Middle East and North Africa. Thereafter, the indices gradually kept gathering momentum through the day's trade as investors continued to aggressively pile up positions in beaten down blue chip stocks. The frontline indices hit the intraday high levels in the late hours of second half however the benchmarks came off the day's high level in dying hours of trade as investors booked partial profits two days ahead of the March F&O series expiry. Eventually the bourses snapped sixth straight session in the positive terrain and sailed well beyond psychological levels of 19,000 and 5700 just below the psychological levels of 5,700 and 19,000. Being into the F&O expiry week, the markets registered strong volumes, on the expected lines, of over Rs 1.93 lakh crore while the turnover for NSE F&O segment was at over Rs 1.76 lakh crore. Market breadth remained negative as there were 1243 shares on the gaining side against 1724 shares on the losing side while 86 shares remained unchanged.

On charts : The S&P SNX Nifty may face strong resistance around  5753 and 5802 (61.80% retracement ) mark  while its near term support will be around 5,683.75 and 5610. However, Nifty should not close below 5586 level.

Finally, the BSE Sensex surged by 177.66 points or 0.94% to settle at 19120.8 while the S&P CNX Nifty climbed 49.10 points or 0.86% to end at 5736.35. The BSE Sensex touched a high and a low of 19,226.21 and 18,944.82 respectively. The BSE Mid-cap and Small-cap indices fell by 0.03% and 0.36%, respectively.

Reliance Communication up 4.13%, Maruti Suzuki up 3.61%, DLF up 3.26%, Bharti Airtel up 2.88% and Tata Power up 2.37% were the major gainers on the Sensex.

On the flip side, BHEL down 1.48% and ICICI Bank down 0.03% were the only losers on the index.

The Indian government cleared on Monday that even as the global crude prices continue to remain at highly elevated levels, it was not considering an immediate increase in retail fuel prices. This however will lead to surge in under-recoveries of the publically controlled fuel retailers.

India's fuel subsidy bill in the current fiscal is now likely to be around Rs 85,000 crore from Rs 70,000 crore as global crude prices have been at elevated levels for a large part of the March quarter. Further, if prices do not come down soon, or remain at current levels for a large part of next fiscal, the subsidy bill can surge further to beyond Rs 1 lakh crore easily in FY12. This can lead to substantial impact on government's finances.

However, for the moment the government is neither considering a hike in retail prices, nor the finance ministry is looking to tweak the duty structure for the oil products. Union Oil and Gas Minister S Jaipal Reddy on Monday said that despite the surge in under-recoveries of oil marketing companies (OMCs) and increase in subsidy outgo, the government would not increase fuel prices at the moment.

In case of petrol however, he stated that it was totally deregulated and OMCs will take a view on when to increase its prices. State-run Indian Oil, Hindustan Petroleum and Bharat Petroleum currently sell petrol at a discount of about Rs 4.50 a litre despite the fact that government deregulated it completely in June last year. Diesel on the other hand, whose price continues to be dictated by the government, is being sold at a loss of Rs 15.79 a litre.

'As far as petrol is concerned, there is no doubt it is decontrolled... Oil companies must be watching global markets and will take studied decision on raising prices,' he said. On diesel he however, added that it was probably not the right time to talk either about deregulating the key fuel or even increasing its sale price. Hs said it was also too early to call a meeting of the Empowered Group of Ministers (EGoM) on oil sector, which is headed by finance minister Pranab Mukherjee, as everyone was busy with the forthcoming state assembly elections.

The government is unlikely to tinker with fuel prices until the crucial state assembly elections are out of the way. Meanwhile, crude prices have been on the upswing owing to political unrest in some countries in Middle East and Africa and implied apprehensions of a shortage. Average cost of India's crude basket has increased to $110.61 a barrel this month as against $72-73 a barrel about couple of quarters ago. Clearly the situation is no less than alarming though given the election constraint the government is not going to make any move for now. 

Auto up 1.53%, TECk up 1.35%, Metal up 1.08%, IT up 1.06%, and Realty up 0.86% were the major gainers in the BSE sectoral space. There were no losers in the BSE sectoral space.

The Indian government has received 74 bids for 33 oil and gas exploration blocks which were on offer under the ninth round of New Exploration and Licensing Policy (Nelp-IX), with majority of the blocks going to state-owned companies such as ONGC. There were hardly any bids from global energy players.

While the ONGC managed major chunk of the blocks on offer, its share has nonetheless come down compared with last few rounds. The company has won 10 blocks, while another state-owned company Oil India (OIL) won three. Together, the two PSUs had placed bids for a total of 29 blocks. In the last round of NELP, ONGC had got nearly two-thirds of the blocks on offer.

Private sector major Reliance Industries, which had skipped last round of NELP, has won two of the six blocks it bid for in the latest round. Another private player Deep Industries has won four blocks. Sankalp Oil and Natural Resources and Ishar Gas Oil too were awarded three blocks each.

The final award of the rights to explore the blocks will be given by the oil ministry in about 3-4 months after it scrutinizes the 33 winning bids. So far, NELP rounds have generated 87 oil and gas discoveries in 26 exploration blocks with proven hydrocarbon reserves of at least 642 million tonne of crude oil equivalent.

A total of 37 companies, comprising eight foreign companies and 29 Indian, had bid either on their own or as part of a consortium. The government contended that its policy to enhance the number of players in the exploration sector had been achieved as was evident from the fact that 10 new companies (two foreign and eight Indian) had bid. "Evaluation of the bids received under NELP-IX will be undertaken by the Government and the blocks are expected to be awarded within three months. The entire process, including signing of contracts, is expected to be completed in four months," said the Union Oil and Gas Minister S Jaipal Reddy. 

The S&P CNX Nifty touched a high and a low of 5,770.35 and 5,680.70 respectively.

The top gainers on the Nifty were RCOM up 4.37%, Sesagoa up 4.31%, BPCL up 3.47%, Maruti up 3.35% and Dr. Reddy up 3.24%.

The top losers on the index were IDFC down 1.72%, Grasim down 1.38%, BHEL down 1.38%, Reliance Capital down 1.10% and Cairn India down 0.38%.

European markets were trading in mix on Tuesday. France's CAC 40 declined 0.60%, Germany's DAX plunge by 0.74% and Britain's FTSE 100 fall by 0.22%.

Asian equity indices finished the day's trade on the mixed note on Tuesday. Japanese Nikkei edged lower in the trade as country struggled to contain a meltdown at a nuclear power plant and investors remained worried over the crippled nuclear plant and the impact of the natural disaster on corporate earnings. However, Taiwan Weighted surged more than half a percent led by cement and oil counters, offsetting a second successive limit-down finish for computer maker Acer Inc. Banking shares also gave a lift to the main share index. Among Asian indices, Seoul Composite and Taiwan Weighted led the gainers list while Shanghai Composite, Jakarta Composite and Nikkei 225 edged lower in the trade.

HOLDING ON THE GAINS

Local bourses after surging to their two month highs in the early morning session are now gyrating around that level. The Indian markets seem in no mood to relent and have buckled under pressure as investors extended their buying spree for sixth straight session with crude oil prices seemingly under control and the street inclined to believe that tensions in Middle East may be easing. Moreover, there are some good news trickling in from corporate India ahead of the earnings season which will kick off in mid-April. The fact that crude oil prices haven't gone up in the last few days and that prices of other commodities too seem to be correcting may be signaling investor's that the worst may be over thereby, prompting them to indulge in some serious buying. Further, data showing stepping up of buying by foreign funds has also underpinned sentiment. According to data released by the Securities and Exchange Board of India (SEBI), the FIIs on Monday were the net buyers in equities with gross buying of Rs 3329.90 crore against gross sell of Rs 1812.00 crore. On the global front, Asian shares were trading lower tracking overnight losses in the US markets, which fell on clouded corporate outlook ahead of earnings amidst continued uncertainty which crept in from abroad.

Back home, Sensex is calmly trading above its 19k mark, while Nifty too was comfortable above its 5700 level. The broader indices though were in green but were underperforming their larger peers. On the BSE sectoral front, stocks from TECk, Power and Auto counters added to the market enthusiasm, while, stocks from Realty counter were the only spoil sports. The overall market breadth on BSE was in the favour of declines which thrashed advances in the ratio of 1237:1035, while, 96 shares remained unchanged. 

The BSE Sensex is currently trading at 19,073.62, up by 130.48 points or 0.69%. The index has touched a high of 19,116.25 and a low of 18,944.82 respectively. There were 24 stocks advancing against just 5 declines on the index, while 1 share remained unchanged.

The broader indices were trading in green; the BSE Mid cap and Small cap indices surged 0.34% and 0.33% respectively. 

The top gaining sectoral indices on the BSE were, TECk up by 0.93%, Power up by 0.80%, Auto up by 0.70%, Metal up by 0.66% and IT up by 0.65%. While Realty down by 0.69% was the lone loser on the index.

The top gainers on the Sensex were Reliance Communication up by 2.90%, Hero Honda up by 2.80%,  Bharti Airtel up by 2.42%, Tata Power up by 2.33% and Reliance Infra up by 1.78%.

On the flip side, DLF down by 1.24%, Jaiprakash Associates down by 0.96%, Tata Motors down by 0.31% and ITC down by 0.08% were the only losers on the index.

Meanwhile, the much awaited draft guidelines for giving new banking licenses would be released by the Reserve Bank of India (RBI) in the next few days itself, said the Indian government on Monday. The same will be put in public domain for comments and after taking into account the response of various stakeholders to the draft guidelines, final guidelines will be released.

"RBI has indicated that by the end of the month they will come out with draft guidelines," said the secretary in the department of economic affairs of the ministry of finance R Gopalan on Monday. The government had earlier in the General Budget for 2011-12 said that the central planned to issue guidelines for the grant of new banking licenses before the close of this financial year.

Union Finance Minister Pranab Mukherjee had in FY11's Budget announced that the Reserve Bank would consider giving traditional banking licenses to private sector players in order to increase the penetration of banking services in the country. Since then, granting new banking licenses has been part of the debate on how to best approach the financial inclusion which is a key agenda for the UPA-II government.

The RBI had earlier floated a discussion paper in August, 2010, on giving out new banking licenses to business houses and non-banking finance companies. It had then raised a number of issues in this context including who should get the license, what should be the threshold capital requirement, should the new banks have complete freedom in branching like existing Indian banks, and should the new banks have FDI ceiling at par with the current private sector banks etc. At present, the country has 26 public sector banks which include 19 nationalized banks, the State Bank of India and its seven subsidiaries; seven new private sector banks; 15 old private sector banks and 31 foreign banks. Besides there are a number of regional rural and local area banks as well as various cooperative banks. However, the commercial banks enjoy a lion's share in financial services. This is reason why the finance ministry is keen in expanding the reach of commercial banks rather than focusing on regional rural or cooperative banks. 

The S&P CNX Nifty is currently trading at 5,719.75, higher by 32.50 points or 0.57%.The index has touched a high of 5,732.50 and a low of 5,680.70 respectively. There were 38 stocks advancing against 12 declines on the index.

The top gainers of the Nifty were Reliance Communication up by 2.94%, Sesa Goa up by 2.89%, Hero Honda up by 2.85%, Bharti Airtel up by 2.54% and Dr Reddy Lab up by 2.18%.

DLF down by 1.24%, JP Associates down by 1.02%, IDCF down by 1.00%, Ranbaxy down 0.84% and Tata Motors was down by 0.63%, were the major losers on the index.

Shanghai Composite was up by 0.32%, Hang Seng inched up 0.10%, KLSE Composite gained 0.11%, Seoul Composite added 0.47% and Taiwan Weighted was up by 0.26%.

On the flip side, Straits Times declined 0.02%, Nikkei 225 was down by 0.06% and Jakarta Composite lost 0.62%.

TOP PICKS FOR 29th MARCH

Markets continue with its uptrend & the crucial levels for SENSEX & NIFTY are 5700 & 19000, which if held then we can safely assume that the correction is over. For tomorrow the Nifty is expected to make a dash for 5788 & on the downside may slip to 5581 - 5529. Long positions can be taken in WIPRO for a target of 484, VIJAYABANK for a target of 87, SINTEX for a target of 164, SREINFRA for a target of 54, SYNDIBANK for a target of 130.
                                             HAPPY INVESTING ........ CHEERS !!!

UPTREND CONTINUES

Stock markets in India extended the uptrend on the first day of the F&O expiry week, after vivaciously rallying over two percent on Friday, and managed to finish a choppy session of trade on an optimistic note as the joy of closing in the positive territory got quintupled. The benchmarks displayed resilience as they traded firmly in the green for most part of the day's trade on the back of heavy buying in rate sensitive counters like Auto and Baking and managed to touch two month high levels. Investors traded with some conviction as growth concerns over Europe weighed on crude oil prices. However, the frontline indices met with stern resistance at the psychological levels of 5,700 and 19,000 as investors took profits off the table around those levels after reports of fierce retaliation between Western forces and forces loyal to Col Gaddafi emerged. The bourses climbed over half a percent in the session despite tepid leads from markets across the globe as investors speculated most of the headwinds have been factored in by the markets and that the companies will report strong quarterly earnings for the fourth quarter. Meanwhile, local sentiments also took cues from CII Survey which opined that the ongoing high inflation and resulting rapid increase in costs has so far been unable to significantly dent the performance of India Inc. The NSE's 50-share broadly followed index Nifty, receded after claiming 5,700 mark, an important psychological level, and settled a tad below the level while Bombay Stock Exchange's Sensitive Index, Sensex surged by over a hundred points and conquered the crucial 18,900 level. The broader markets too traded on healthy note but failed to perform in tandem with their larger peers nevertheless the BSE's midcap index went home with gains of 0.42% while the smallcap index rose 0.12% points. On the sectoral front, rate sensitive Auto pocket surged by 1.52% led by heavyweight Tata Motors which zoomed 3.25%, being the top gainer on Sensex while stocks like Maruti Suzuki and Cummins India too gained around 1.50% each. The Capital Goods index too remained amid the thick of things and advanced 1.27% on the back of gains in majors like L&T which was up 2.56% and Alstom Projects up 2.25%. On the other hand the Healthcare index languished at the bottom of the table with losses of 1.17% as massive sell-off in stocks like Aurobindo Pharma and Jubilant Life Sciences which respectively shaved off 5.84% and 3.74% dragged the counter. Index bellwether Reliance Industries remained highly unstable in the session and slipped marginally by the end of trade after rallying in the initial moments of trade on reports of forming a financial JV with D E Shaw Group to build a leading financial services business in India.

On the global front, majority of Asian equity indices finished in the negative led by Japanese stocks which declined more than half a percent on fresh concerns over a stricken nuclear power complex as radioactive water slowed repair work at the plant.  The European markets traded on a cautious note as France's CAC, Germany's DAX and Britain's FTSE exhibited mixed trend. On the other hand, the screen trading for US index futures indicated that the Dow could open on a flat note.

Earlier on Dalal Street, the benchmark got off to a soft start as fresh worries over high levels of radiation in Japan emerged which delayed efforts to stabilize a crippled nuclear power plant and shoddier than expected earnings reported by some blue chips companies weighed on cautious investor mood. After hitting intraday lows in the early hours, the frontline indices rose to higher levels on the back of buying in blue chips and fertilizer stocks. However, the session largely remained characterized by choppiness as investors seemed reluctant to pile up hefty positions after the recent over five percent rally. Eventually the bourses snapped fifth straight session in the positive territory and just below the psychological levels of 5,700 and 19,000. The markets registered strong volumes of over Rs 1.75 lakh crore while the turnover for NSE F&O segment was at over Rs 1.59 lakh crore. Volumes were large on expected line as the markets have entered the F&O expiry week. Market breadth remained negative as there were 1243 shares on the gaining side against 1724 shares on the losing side while 86 shares remained unchanged.

Finally, the BSE Sensex surged by 127.50 points or 0.68% to settle at 18,943.14 while the S&P CNX Nifty climbed 33.00 points or 0.58% to end at 5,687.25.

The BSE Sensex touched a high and a low of 19,024.18 and 18,799.57 respectively. The BSE Mid-cap and Small-cap indices increased by 0.42% and 0.12%, respectively.

Tata Motors up 3.25%, Bharti Airtel up 2.57%, L&T up 2.56%, Reliance Infra up 1.76% and Maruti Suzuki up 1.69% were the major gainers on the Sensex.

On the flip side, Jaiprakash Associate down 2.16%, Reliance Communication down 1.50%, Sterlite Industries down 0.89%, Infosys down 0.71% and DLF down 0.66% were the major losers on the index.

After nearly two years of delay, the ministry of civil aviation finally seems set to get the new ground-handling policy implemented. It has asked all airport operators in the country to initiate steps to implement the new policy from April 1 in an effort to enhance safety and improve quality of services.

The move comes even as the airlines continue to protest the new policy. All the private airlines have been opposing the new policy citing various reasons from causing unemployment among the current ground handling staff to potential losses that will accrue to them. The government did defer the implementation of the policy on airlines' plea at least thrice. Now however, the government has rejected any further delays and the Delhi high court too has recently rejected a plea by airlines to get a stay on implementation of the policy.

The new policy requires that the airlines outsource the ground handling operations at the airports to other operators selected for the job. Under the new policy, only the government owned Air India, the airport operator and a third private operator selected through the competitive bidding will be allowed to provide ground handling services. All private carriers will have to tie up with one of these to provide services. Obviously, this will hike the costs of ground services for airlines.

The civil aviation ministry had announced the new policy in 2008 and was expected to put in place the new ground-handling norms from January 1, 2009. However, the downturn in the economy following the global financial crisis and resulting substantial negative impact on civil aviation industry forced it to defer the implementation thrice as the move was strongly opposed by the airlines which were then struggling with declining air-traffic. 

Now, however, things have changed sharply in the aviation space. The industry has enjoyed more than a year of surging air traffic, and air fares have already crosses the peaks seen in the pre-crisis period. The industry, though still under somewhat pressure by accumulated substantial and rising cost of aviation turbine fuel, is certainly in much better position to cope with the small financial burden that it will face with the new policy.

Nonetheless, the implementation of the new ground handling norms will have some impact on the profitability of airlines. That is the reason that carriers have been looking to get yet another postponement for the policy. However, this looks difficult now as the civil aviation ministry feels that with surging demand for air-travel demand, it was the best time to implement the new policy and is keen to get the same kick-started on April 1.

Auto up 1.52%, Capital Goods up 1.27%, Bankex up 1.21%, FMCG up 0.86%, and Consumer durables up 0.61% were the major gainers in the BSE sectoral space.

On the other hand Health Care (HC) down 1.17%, Realty Down 0.56%, Metal down 0.29%, IT down 0.18% and Oil & Gas down 0.04% were the major losers in the BSE sectoral space.

Following the substantial increase in export duty on iron ore, the price of the key raw material has been coming down in the country. According to the steel makers and miners, iron ore prices have gone down by around 10% in the last few weeks. Going forward, there is expectation of a further decline as demand remains soft.

The Union Government had increased export duty on iron ore fines by four-fold to 20% in the General Budget for 2011-12 in a bid to discourage exports and conserve the material for use by the steel makers within the country. While this has been a major demand of steel players for quite some time and will take pressure off the cost side of steel makers, the increase in duty will certainly hit the prospects of miners.

According to the industry insiders, percentage drop from mid February to mid March in iron ore prices range between 10-15%, depending on the grades, where lower grades have got a bigger hit than the higher grades. However, it is difficult to say where the ore will bottom out because there have been global developments too that can significantly impact the contract prices at international level.

Iron ore prices have come down significantly in China as well in recent days following apprehension of slowdown in demand because of the double natural calamity in Japan and the following nuclear crisis that is still continuing. Japan is second largest steel maker in world after China and decline in production there can have substantial impact on demand and hence prices of iron ore.

Though most of India's iron ore is shipped to China, the demand slump in Japan is expected to have significant impact on international contract prices. These in turn will serve as benchmark for spot prices and most analysts expect spot iron ore prices to come down further once the next quarterly agreements are signed. An additional factor in case of India is that domestic steel capacity is significantly low compared with iron ore output and as the surplus increase at home due to higher export duty; the fall in prices can be greater than global softening in the key raw material.

The S&P CNX Nifty touched a high and a low of 5,709.10 and 5,643.20 respectively.

The top gainers on the Nifty were Tata Motors up 3.43%, Bharti Airtel up 2.37%, IDFC up 2.31%, L&T up 1.85% and Maruti up 1.65%.

The top losers on the index were Sun Pharma down 3.48%, GAIL down 2.14%, JP Associate down 2.10%, RCOM down 1.73% and Sesa Goa down 1.67%.

European markets were trading in mix on Monday. France's CAC 40 gained 0.10%, Germany's DAX fall by 0.19% and Britain's FTSE 100 surged by 0.05%.

Asian equity indices finished the day's trade mostly in the negative terrain on Monday led by Japanese Nikkei which declined more than half a percent on fresh concerns over stricken nuclear power complex as radioactive water slowed repair work at the plant. The Fukushima Dai-ichi complex has been leaking radiation since it was severely damaged on March 11, 2011 following a massive earthquake and tsunami that ruined the country's northeastern coast. However, Seoul Composite ended flat-to-positive on taking support from gains in steelmakers like POSCO.

MARKETS CONTINUE TO TRADE HIGHER

The Indian benchmark equity indices continue to trade higher in late afternoon session due to strong global cues, European markets were trading mostly in green and US index futures were also trading higher, adding positive sentiments to the domestic markets. On the other hand, most of the other Asian markets settled in red. Back home, in BSE sectoral front Capital Goods, Bankex, Auto and CD indexes gained more than one percent and are witnessing strong buying, while profit booking was seen among the IT shares after two consecutive sessions of gains last week. The BSE IT index was down 0.40%. However, the broader indices are holding on to modest gains; the BSE Mid-cap and Small-cap indices soared 0.51% and 0.34%, respectively.

The Overall market breadth on BSE was negative; decliners outnumber the advances in the ratio 1580:1294, while, 109 shares remained unchanged.

The BSE Sensex surged 145.68 points or 0.77% at 18,961.32. The index touched a high and a low of 19,024.18 and 18,799.57, respectively.

The BSE Mid-cap and Small-cap indices soared 0.51% and 0.34%, respectively.

In the BSE sectoral indices Capital Goods up 1.71%, BANKEX up 1.46%, Auto up 1.40%, CD up 1.34% and FMCG up 0.74% were the major gainers. While Health Care down 1.17%, Realty down 0.49% IT down 0.40%, Metal down 0.30% and TECk down 0.05% were the major losers.

The top gainers on the Sensex were L&T up 3.23%, Tata Motors up 2.89%, Reliance Infra up 2.21% Bharti Airtel up 2.03% and ONGC up 1.85%.

On the flip side, JP Associates down 1.77%,Reliance Communication down 1.36%, Infosys down 0.92%, Sterlite industries down 0.92% and Cipla down 0.84% were the only losers on the index.

Following the substantial increase in export duty on iron ore, the price of the key raw material has been coming down in the country. According to the steel makers and miners, iron ore prices have gone down by around 10% in the last few weeks. Going forward, there is expectation of a further decline as demand remains soft.

The Union Government had increased export duty on iron ore fines by four-fold to 20% in the General Budget for 2011-12 in a bid to discourage exports and conserve the material for use by the steel makers within the country. While this has been a major demand of steel players for quite some time and will take pressure off the cost side of steel makers, the increase in duty will certainly hit the prospects of miners.

According to the industry insiders, percentage drop from mid February to mid March in iron ore prices range between 10-15%, depending on the grades, where lower grades have got a bigger hit than the higher grades. However, it is difficult to say where the ore will bottom out because there have been global developments too that can significantly impact the contract prices at international level.

Iron ore prices have come down significantly in China as well in recent days following apprehension of slowdown in demand because of the double natural calamity in Japan and the following nuclear crisis that is still continuing. Japan is second largest steel maker in world after China and decline in production there can have substantial impact on demand and hence prices of iron ore.

Though most of India's iron ore is shipped to China, the demand slump in Japan is expected to have significant impact on international contract prices. These in turn will serve as benchmark for spot prices and most analysts expect spot iron ore prices to come down further once the next quarterly agreements are signed. An additional factor in case of India is that domestic steel capacity is significantly low compared with iron ore output and as the surplus increase at home due to higher export duty; the fall in prices can be greater than global softening in the key raw material. 

The S&P CNX Nifty gained 40.50 points or 0.72% at 5,694.75. The index touched high of 5,709.10 and a low of 5643.20, respectively.

The top gainers on the Nifty were L&T up 3.59%,Tata Motors up 2.99%, IDFC up 2.38%,Reliance Infra up 2.085 and HUL up 2.05%.

On the other hand, Sun Pharma down 3.72%, JP Associates down 1.83%, GAIL down 1.68%, Sesa Goa down 1.63% and Reliance Communication down 1.50% were the major losers on the index.

On the other hand ,most of the other Asian markets settled in red. Hang Seng down 0.39%, Jakarta Composite declined 0.12%, KLSE Composite down 0.09%, Nikkei 225 down 0.60%, Taiwan Weighted down 0.67% and Straits Times declined 0.44%, while Seoul Composite advances 0.11% and Shanghai Composite surged 0.21%,

Most of the European markets trading positive; FTSE advanced 0.25% and CAC 40 surged 0.11% while DAX decreased 0.06%.