Benchmarks trim losses after a soft start; global cues weigh

The Indian equity indices have opened in the red but trimmed their losses and are trading with a moderate cut despite a severe sell-off in the US. The global cues remained subdued as the US markets got hammered again overnight, recoiling all their gains of previous session while, most of the Asian equity indices were trading in the negative terrain at this point of time. The sentiments also dampened on rumors that there may be downgrade in France, which commands AAA rating. Back home, on the sectoral front, healthcare, fast moving consumer goods and banking remained the top gainers while, software, auto and realty remained the top losers on the BSE sectoral space. Meanwhile, IT stocks fell on European debt worries. Europe is the second biggest market for Indian IT firms after the US. However, Telecom stocks like, Tata Communication, Reliance Communication and Idea Cellular all were trading higher in the trade as the Department of Telecom (DoT) has decided to give the Telecom Regulatory Authority of India (TRAI) more powers regarding spectrum management to obtain reviews and recommendations on the entire range of present spectrum usage. The broader indices were trying to get some traction and were trading flat at this point of time while, the market breadth has been evenly divided; there were 816 shares on the gaining side against 807 shares on the losing side while 80 shares remained unchanged. 

The BSE Sensex opened at 17,056.61; about 74 points lower compared to its previous closing of 17,130.51, and has touched a high and a low of 17,155.33 and 17,017.69 respectively.

The index is currently trading at 17,116.97, down by 13.54 points or 0.08%. There were 10 stocks advancing against 20 declines on the index.

The overall market breadth has equally divided with 47.92% stocks advancing against 47.39% declines. The broader indices were trading flat; the BSE Mid cap and Small cap indices were up by 0.01% and 0.09% respectively.

The top gaining sectoral indices on the BSE were, HC up by 0.95%, FMCG up by 0.36%, Bankex up by 0.26%, Metal up by 0.19% and Oil and Gas up by 0.12%. While, IT down by 0.93%, Auto down by 0.93%, Realty down by 0.70%, TECk down by 0.69% and Power down by 0.12% were the top losers on the index.

The top gainers on the Sensex were Cipla up by 1.41%, Sun Pharma up by 1.01%, HDFC up by 1%, HDFC Bank up by 0.60% and Coal India was up by 0.47%.

On the flip side, Tata Power down by 2.13%, Tata Motors down by 1.90%, TCS down by 1.43%, Maruti Suzuki down by 1.38% and M&M down by 1.28% were the top losers on the index.

Meanwhile, the food ministry has so far allowed 4.33 lakh tonnes of sugar exports out of 5 lakh tonnes. In June, the government had allowed additional export of 5 lakh tonnes under the open general license (OGL). As per the latest official data, the ministry has issued export release order to mills for 4,33,045 tonnes of sugar till August 8.    

In month of April, the government had permitted exports of 5 lakh tonnes of sugar, out of which 51,500 tonnes were kept aside for the neighbouring countries. Presently, sugar industry is under government control, and sugar mills are required to ask for release order (RO) from the ministry before taking any export orders. The food ministry had allocated the total export quota to sugar mills on the basis of their last three year’s average production. The mills are allowed to export sugar either from their own mill or from the third party.

The government has permitted the exports 1 million tonnes of sugar in OGL in current financial year due to record production in 2010-11 and fall in domestic retail prices which is around Rs 32-33 per kg. The Indian Sugar Mill Association (ISMA) has been demanding export of additional 1 million tonnes of sugar on the back of higher global prices and record production.

India is the second largest producer and largest consumer of sugar, its production for the current season is pegged at 24.2 million tonnes from 19 million tonnes in the last season. The annual demand for the sugar is around 21 to 21.5 million tonnes.

The S&P CNX Nifty opened at 5,128.00; about 33 points lower compared to its previous closing of 5,161.00, and has touched a high and a low of 5,169.55 and 5,121.00 respectively.

The index is currently trading at 5,155.70, down by 5.30 points or 0.10%. There were 23 stocks advancing against 27 declines on the index.

The top gainers of the Nifty were Cipla up by 1.37%, RCom up by 1.34%, Dr Reddy up by 1.25%, Reliance Infra up by 1.12% and Kotak Bank up by 1.10%.

Tata Power down by 2.26%, Tata Motors down by 1.97%, SAIL down by 1.56%, TCS by 1.38% and DLF was down by 1.38%, were the major losers on the index. Most of the Asian equity indices were trading in the red; Hang Seng was down 286.97 points or 1.45% to 19,496.70, Jakarta Composite was down 27.65 points or 0.72% to 3,835.92, KLSE Composite was down 7.21 points or 0.49% to 1,473.31, Nikkei 225 was down 92.98 points or 1.03% to 8,945.76, Straits Times was down 46.88 points or 1.66% to 2,774.21 and Taiwan Weighted was down by 26.12 points or 0.34% to 7,710.20.

On the flip side, Seoul Composite was up 11.56 points or 0.64% to 1,817.80 and Shanghai Composite was up by 10.94 points or 0.43% to 2,560.12.