Nifty turns red after a positive start; BSE shuts markets due to network outage

Indian equity benchmark Nifty, extending its previous session’s northward journey, made a positive start as sentiments got some support from Agriculture Minister's statement that the monsoon will pick up pace next week and the government is prepared to deal with any eventuality in case of a shortfall. However, soon the index entered into negative terrain and is trading slightly in the red as investors opted to book profit after four days of continues gains. However, BSE closed trade on temporary basis due to network outage, though HCL’s tech team working to resolve all issues.

On the global front, the US markets ended mostly in green, though the trade remained quiet throughout the session with investors seemed reluctant to make any significant moves ahead of the release of the closely watched monthly nonfarm payroll data on Thursday. Asian markets were trading mixed at this point of time after Chinese official gauges of services dropped to 55 from 55.5 in May, while the HSBC Services PMI jumped to 15 month high of 53.1 from 50.7 in May.

Back home, stocks related to metal counter continue to trade higher for second day in a row triggered by data showing that China’s manufacturing expanded in June at the fastest pace this year. Meanwhile, there is a report of CAG stating that the public sector oil marketing companies (OMCs) made Rs 50,000 crore profit in 2007-12 by selling oil and petroleum products to consumers, contrary to the perception that they are selling oil at a loss. On the sectoral front, pharma, technology and metal witnessed the maximum gain in trade, while realty, media and energy remained the top losers on the NSE sectoral space.

The CNX Nifty opened at 7,734.35; about 10 points higher as compared to its previous closing of 7,725.15, and has touched a high and a low of 7,754.65 and 7,708.65 respectively. The index is currently trading at 7,715.05, down by 10.10 points or 0.13%. There were 18 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were Tech Mahindra up by 2.23%, TCS up by 1.23%, Sun Pharma up by 1.09%, MCDOWELL-N up by 0.96% and SSLT up by 0.95%. On the flip side, Bajaj Auto down by 2.61%, Hero MotoCorp down by 2.37%, Tata Power down by 1.87%, NTPC down by 1.85% and Indusind Bank down by 1.81% were the major losers on the index.

Meanwhile, The Food Ministry has pitched for approval to end the subsidy for raw sugar exports one year earlier. Food ministry has stated that the scheme is being availed only by a few sugar mills and therefore it has moved a note to cabinet to suspend the sugar export incentive scheme by September 2014.

Food Ministry further added that sugar mills in Uttar Pradesh are not getting benefited from the scheme despite the fact that sugarcane arrears are highest at Rs 7,200 crore in the state. Further, many mills have not shown adequate interest in the scheme as they had exported major quantity of sugar before the launch of the scheme in February.

In February 2014, the government has started the scheme to give a subsidy for export of raw sugar up to 4 million tonnes during 2013-14 and 2014-15 marketing years (October-September). As per the notification, the subsidy will be calculated every two months after taking into account the average exchange rate of rupee vis-a-vis the dollar. The government had fixed Rs 3,300 per tonne for February-March and Rs 2,277 per tonne for April-May, taking into account the dollar-rupee fluctuation. The new government had set the export subsidy at Rs 3,300 per tonne for June-July.

India is world's second largest sugar producer and biggest consumer of sugar. India’s sugar production is likely to be at 23.8 million tonnes in 2013-14, as against 25.1 million tonnes in the last year.

Asian markets were trading mostly in the green; Straits Times gained 14.21 points or 0.44% to 3,278.12, Shanghai Composite increased by 1.67 points or 0.08% to 2,061.09, FTSE Bursa Malaysia KLCI soared 0.31 points or 0.02% to 1,887.15 and Taiwan Weighted was up by 37.57 points or 0.40% to 9,522.53.

On the flip side, Nikkei 225 tumbled by 34.29 points or 0.22% to 15,335.68, Hang Seng slipped 23.56 points or 0.10% to 23,526.06, KOSPI Index dropped 4.61 points or 0.23% to 2,010.67 and Jakarta Composite was down by 7.57 points or 0.15% to 4,900.71.