Benchmarks continue to hold their head above water

After getting a cautious but positive start, benchmarks continue to hold their head above water despite any positive trigger at home front, with investors keenly eyeing the industrial production data for April and Consumer Price Index Inflation for May to be released later in the day.  Holding slender gains, both Sensex and Nifty were trading little short of the crucial 25,550 and 7,650 levels respectively. However, a weakening trend on the other Asian markets following overnight losses on the US bourses, limited the gains on the domestic markets. Sentiment on the street weakened further on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 313.40 crore on June 11, 2014.

In scrip specific development, Shares of Bharti Airtel tumbled after Credit Suisse downgrades the stock to ‘underperform’ from ‘neutral’ and reduced the target price. Further, HDIL has dipped after Nomura Singapore offloaded more than two million shares of the Mumbai-based real estate firm through an open market transaction.

On the global front, Asian stocks fell, with the regional benchmark index retreating from its highest close in six years, after US stocks dropped by the most in three weeks along with European equities as the World Bank cut its global growth forecast. Back home, stocks from Oil & Gas, Healthcare and PSU counters were supporting the markets’ uptrend, while those from Information Technology, Banking and Auto counters were adding to the underlying cautious undertone.  The market breadth on BSE was positive, out of 2431 stocks traded, 1312 stocks advanced, while 1048 stocks declined on the BSE.

The BSE Sensex is currently trading at 25544.10 up by 70.21 points or 0.28% after trading in a range of 25611.32 and 25409.69. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.31%, while Small cap index gained 0.05%.

The top gaining sectoral indices on the BSE were, Oil and Gas up by 1.18%, Healthcare up by 0.68%, PSU up by 0.58%, Metal up by 0.38% and Capital Goods up by 0.29% while Teck down by 0.70%, IT down by 0.55%, Bankex down by 0.09% and Auto down by 0.03% was the few losers on the sectoral index.

The top gainers on the Sensex were ONGC up by 2.75%, Tata Power up by 1.96%, HDFC up by 1.82%, Cipla up by 1.56% and Hindalco up by 1.45%. On the flip side, Bharti Airtel was down by 3.06%, Axis Bank was down by 1.08%, Coal India was down by 0.82%, Infosys was down by 0.78% and ICICI Bank was down by 0.75% were the top losers on the Sensex.

Meanwhile, in a development which could halt the recent rally of sugar stocks, the Commerce Ministry underscored that it was not looking at hiking import duty on sugar, as the ministry had yet not received any proposal in this regard. 

This clarification came from the Ministry right after Food minister Ram Vilas Paswan asserted the government was examining sugar industry's demand to increase the import duty to 40% from 15%, to support local prices to help mills clear dues to cane growers. He also added that petroleum ministry would also examine the issue of increasing the percentage of ethanol blending in petrol for reviving the sugar industry.

On concerns of move being compliant with regulations under World Trade Organization (WTO), the Commerce Ministry underscored that country will not be of the mark on hiking import duty as WTO will allow putting temporary curb, if it was on the premise of domestic availability of the product. Back in March, few WTO members, including Australia, asked India to remove immediately the export subsidy of Rs 3,300 a tonne on raw sugar, claiming it could distorts the global trade.

Some recent reports also suggested of government mulling a proposal for providing additional interest-free loans of Rs 4,400 crore, over the granted Rs 6,600 crore to cash-starved sugar mills to clear dues to cane farmers. The bailout package for sugar industry was discussed in the meeting attended by Transport Minister Nitin Gadkari, Women and Child Development Minister Maneka Gandhi, Agriculture Minister Radha Mohan Singh and others.

Currently, sugarcane arrears stand at about Rs 11,000 crore across the country, with the maximum of Rs 7,200 crore in Uttar Pradesh, according industry body, Indian Sugar Mills Asssociation.

The CNX Nifty is currently trading at 7,632.35 up by 5.50 points or 0.07% after trading in a range of 7,652.10 and 7,593.80. There were 27 stocks advancing against 23 declining on the index.

The top gainers of the Nifty were ONGC up by 2.36%, Tata Power up by 1.82%, HDFC up by 1.77%, Hindalco up by 1.51% and Cipla up by 1.23%. On the flip side, Bharti Airtel down by 3.41%, Infosys down by 1.34%, HCL Tech down by 1.32%, Indusind Bank down by 1.25% and Bank of Baroda down by 1.12% were the major losers on the index.

Asian equity indices were trading mostly in the red; Nikkei 225 declined 0.79%, Hang Seng decreased by 0.12%, KOSPI Index dipped 0.44%, Jakarta Composite slipped by 0.75%, Shanghai Composite tumbled 0.22%, FTSE Bursa Malaysia KLCI was down by 0.10% and Straits Times was down by 0.01%.