Indian markets make soft start on profit booking

The Indian equity markets have made soft start as funds and retail investors booked their profits after recent gains amid weakening trend on other Asian bourses tracking overnight losses on the US markets on renewed concerns over Greece's debt crisis, mainly influenced the trading sentiment. Back home, Telecom stocks are remained on investors’ radar as the government opined that mergers of up to 35 percent market share of the resultant entity would be through the automatic route, a move that would pave the way for liberal M&As in the sector. On the sectoral front power, capital goods and technology remained the top gainers while, consumer durables, metal and oil and gas witnessed the most selling pressure, dragging down the Sensex. Meanwhile, Aviation stocks flied higher in the trade after public sector oil marketing companies cut jet fuel prices by a marginal Rs 350 per kilolitre from midnight February 15, 2012, the second reduction in this month. Moreover, Power stocks extended their gains in initial trade after the PMO initiated the clearance of coal supply to private sector power producers yesterday. The broader indices were benchmarks and the market breadth on the BSE was positive; there were 915 shares on the gaining side against 774 shares on the losing side while 69 shares remained unchanged. 

The BSE Sensex opened at 18,163.05; about 40 points lower compared to its previous closing of 18,202.41, and has touched a high and a low of 18,180.42 and 18,112.37 respectively.

The index is currently trading at 18,147.39 down by 55.02 points or 0.30%. There were 11 stocks advancing against 19 declines on the index.

The overall market breadth has made a positive start with 52.05% stocks advancing against 44.03% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose by 0.19% and 0.46% respectively.

The top gaining sectoral indices on the BSE were, Power up by 1.65%, CG up by 0.85%, TECk up by 0.35% and IT up by 0.18%. While, CD down by 1.04%, Oil and Gas down by 0.99%, Metal down by 0.83%, Bankex down by 0.78% and Realty down by 0.57% were the top losers on the index.

The top gainers on the Sensex were BHEL up by 3.70%, Jindal Steel up by 2.53%, Tata Power up by 2.04%, Cipla up by 1.70% and NTPC up by 1.54%.

On the flip side, Coal India was down by 4.04%, Hindalco was down by 2.71%, Sun Pharma was down by 2.67%, Tata Motors was down by 2.06% and RIL was down by 1.44% were the top losers on the Sensex.

Meanwhile, India has lodged a complaint against Turkey’s policies on imports of cotton yarn, the World Trade Organization (WTO) said. The complaint pertains to Turkey's hiking of import duties to help protect its cotton industry. India has asked for consultations with Turkey as the last step to resolve the disagreement before launching a full-fledged legal dispute. As per government officials, the import duties are affecting Indian exports worth around $600 million per year.

Turkey is a major producer of cotton and recorded a huge surge in imports starting 2005. By 2007, the share of imports of cotton yarn in the Turkish market had gone up to 12.5% against 2.8% in 2004. As a result, although total consumption of cotton yarn rose in the period, Turkish employment in the industry fell steadily and domestic production dropped.  Hence to protect its local industry, Turkey brought in the safeguard measures in 2008 for three years. However, instead of the maximum duty of 5% it had agreed with the WTO, it boosted import tariffs to 15-20%.

Also when the three years expired in July 2011, Turkey imposed provisional safeguard measures while it reviewed the case for an extension. It later re-imposed final safeguard measures. Although Turkey has removed the duty on cotton yarn imports from a few countries, who export cotton yarn in small quantities, it has been re-imposed on Indian cotton yarn imports.

Safeguard measures are temporary protectionist tariffs, permitted by WTO rules, to help a specific industry that is threatened by an unexpected surge of imports. India which is one of Turkey’s major suppliers of cotton yarn has argued that Turkey cannot extend the measures after they expired, nor can it impose provisional safeguard measures on a product, which was already subject to final safeguard measures.

India can ask the WTO to set up a dispute panel to adjudicate if consultations do not settle the matter within 60 days. By requesting consultations, India has also opened the door for other WTO members to join in if they are similarly unhappy with Turkey's treatment of cotton yarn imports.

The S&P CNX Nifty opened at 5,513.75; about 18 points lower compared to its previous closing of 5,531.95, and has touched a high and a low of 5,522.75 and 5,501.75 respectively.

The index is currently trading at 5,505.40, lower by 26.55 points or 0.48%. There were 14 stocks advancing against 36 declines on the index.

The top gainers of the Nifty were BHEL up by 2.98%, Reliance Infra up by 2.94%, Jindal Steel up by 2.52%, Cipla up by 1.81% and Tata Power up by 1.81%.

On the flip side, Coal India down by 4.06%, Sun Pharma down by 3.00%, Hindalco down by 2.55%, Tata Motors down by 2.47% and Sterlite Industries down by 2.00%, were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite was down 4.24 points or 0.18% to 2,362.46, Hang Seng was down 129.25 points or 0.60% to 21,235.98, Jakarta Composite was down 17.47 points or 0.44% to 3,935.57, KLSE Composite was down 11.39 points or 0.73% to 1,549.91, Nikkei 225 was down 9.53 points or 0.10% to 9,250.81, Straits Times was down 16.93 points or 0.56% to 2,994.75, Seoul Composite was down 23.02 points or 1.14% to 2,002.30 and Taiwan Weighted was down by 69.93 points or 0.87% to 7,935.31.