Indian equities add gains to continue firm trade

Indian equities add gains to continue its firm trade above neutral line in green in the late afternoon session on back of buying in the frontline blue chip counters. Initially, the markets traded on a subdued note through the morning trades tracking the apathetic cues from Asian peers. Later on the frontline gauges which showed side-ways movement since the start of trade and see-sawed around the psychological mark, started showing some strength and gained momentum. Traders were seen piling up position in Auto, Health Care and IT sector while selling was witnessed in Capital Goods, Power and Realty sector. Also, investors came across official data showing FDI into India increased by a whopping 74% to $2.21 billion in February as compared to the same month last year taking FDI for the period April- February 2011-12 to $24.8 billion, substantially higher than $19.42 billion in 2010-11, and $25.83 billion in 2009-10. Tata Motors, Maruti, M&M, Hero MotoCorp and Bajaj Auto from Auto pack was seen trading firm in green pulling the markets higher. HCL Tech, Infosys and TCS from IT space was seen trading in green. However, L&T and BHEL from Capital Goods space was seen trading in red putting pressure on the market.

On the global front, Asian markets were trading on a mix note while the European markets were trading in green on optimistic note. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,300 and 17,400 levels respectively. The market breadth on BSE was in favor of advances in the ratio of 1439:1286 while 112 scrips remained unchanged.

The BSE Sensex is currently trading at 17,493.69 up by 101.30 points or 0.58% after trading as high as 17,509.13 and as low as 17,361.71. There were 20 stocks advancing against 10 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index rose 0.33% while Small cap soared 0.27%.

On the BSE sectoral space, Auto up 1.56%, Health Care up 1.19%, IT up 0.84%, FMCG up 0.66% and TECk up 0.64% were the major gainers, while Capital Goods down 0.78%, Power down 0.67%, Realty down 0.24%, Consumer Durables down 0.12% and Oil & Gas down 0.11% were the only laggards in the space.

HDFC Bank up 2.64%, Tata Motors up 2.58%, Maruti Suzuki up 2.30%, Coal India up 2.07% and M&M up 1.44% were the major gainers on the Sensex, while BHEL down 3.57%, GAIL India down 1.74%, Hindalco Industries down 1.65%, Wipro down 0.77% and ICICI Bank down 0.70% were the major losers in the index.

Meanwhile, sugar production this year is expected to be more than last year’s production number. Given the additional produce, the government is expected to allow an additional 1 million tonnes of sugar to be exported.  Food Minister, K V Thomas has stated that the decision regarding additional exports will be decided in the coming Empowered Group of Ministers (EGoM) on April 25. The EGoM is also expected to discuss the shipment modalities for the export of the 3 million tonnes recently approved.

As per the Food Ministry, production for the 2011-12 season is likely to touch 25.5 million tonnes, up from 24.6 million tonnes last year. However, according to Indian Sugar Mills Association (ISMA) the production should be around 26 million tonnes.

As per the ISMA, mills have produced 24.63 million tonnes of sugar till April 15 of 2011-12, as compared to 21.73 million tonnes in the year-ago period and hence by the year end, the production should reach 26 million tonnes. In either case sugar production is set to increase.

Sugar production in Uttar Pradesh, the country's second biggest producer, has increased by 18% to 6.91 million tonnes from the corresponding period last year. Similarly, the output in Maharashtra has gone up by 9% to 8.54 million tonnes in the review period. Karnataka, Tamil Nadu and Andhra Pradesh have also reported higher output of 3.72 million tonnes, 1.45 million tonnes and 1.95 lakh tonnes, respectively, so far this year.

Given the excess production the government may consider allowing more sugar exports. So far, the government has allowed exports of 3 million tonnes in three tranches of 1 million tonnes each. However, the export notification for 1 million tonnes approved late March is yet to be issued by the Food Ministry.

The S&P CNX Nifty is currently trading at 5,330.65, higher by 30.65 points or 0.58% after trading as high as 5,338.50 and as low as 5,291.30. There were 32 stocks advancing against 17 declines while 1 stock remained unchanged on the index.

The top gainers on the Nifty were HDFC Bank up 2.61%, Tata Motors up 2.50%, Coal India up 2.08%, Maruti Suzuki up 2.04% and Ranbaxy up 1.91%.

BHEL down 3.76%, Reliance Infrastructure down 2.54%, Hindalco Industries down 1.80%, JP Associates down 1.77% and GAIL India down 1.74% were the major losers on the index.

In the Asian space, Shanghai Composite eased 0.09%, Jakarta Composite declined 0.18%, KLSE Composite down 0.07%, Nikkei 225 sank 0.82%, and Seoul Composite fell 0.23%. On the flipside, Hang Seng climbed 1.03%, Straits Times added 0.14% and Taiwan Weighted advanced 0.23%.

The European markets were trading on a positive note as France’s CAC 40 climbed 0.91%, Germany’s DAX advanced 0.72% and Britain’s FTSE 100 rose 0.41%.