Benchmarks turn positive after a weak start

The Indian equity markets have made a negative start tracking weak cues from global indices. But, short covering witnessed in some of the blue chip stocks supported the local bourses to turn positive and trading above their neutral line. The US markets clawed back and closed with modest losses overnight while, most of the Asian peers were trading in the negative terrain at this point of time. Back home, traders are eyeing the WPI monthly inflation data for further direction. However, the Reserve Bank of India (RBI) Governor D Subbarao ahead of the monetary policy review scheduled on October 25, has again signaled it will maintain its anti-inflationary stance unless inflation eases. On the sectoral front fast moving consumer goods witnessed the maximum gain in trade followed by power and healthcare while, realty, metal and public sector undertaking remained the only losers on the BSE sectoral space. Meanwhile, the cable TV related stocks like Den Network, Dish TV India, Hathway Cable, Zee Entertainment and Wire and Wireless India (WWIL) are extended their gains with the approval of ordinance on digitization of cable network, in a move that could boost prospects for cable television service providers and broadcasters. The broader indices were outperforming benchmarks. The market breadth on the BSE was positive; there were 1,049 shares on the gaining side against 731 shares on the losing side while 71 shares remained unchanged.

The BSE Sensex opened at 16,836.83; about 47 points lower compared to its previous closing of 16,883.92, and has touched a high and a low of 16,972.14 and 16,828.45 respectively.

The index is currently trading at 16,914.54, up by 30.62 points or 0.18%. There were 19 stocks advancing against 11 declines on the index.

The overall market breadth has made a positive start with 56.67% stocks advancing against 39.49% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.20% and 0.47% respectively.

The top gaining sectoral indices on the BSE were, FMCG up by 0.56%, Power up by 0.49%, HC up by 0.45%, Oil and Gas up by 0.33% and CD was up by 0.29%. While, Realty down by 1.87%, Metal down by 1.06% and PSU down by 0.27% were the only losers on the index.

The top gainers on the Sensex were Sun Pharma up by 1.84%, Tata Power up by 1.52%, Jindal Steel up by 1.42%, Hero Motocorp up by 1.12% and ITC was up by 0.97%.

On the flip side, DLF was down by 3.69%, Tata Steel was down by 2.53%, Maruti Suzuki was down by 2.14%, Coal India was down by 2.09% and Hindalco was down by 1.44% were the top losers on the Sensex.

Meanwhile, India, the second largest wheat producer is expected to set a new record of wheat production for the current crop year. The Agriculture Minister Sharad Pawar said that the “Wheat production is expected to cross 86 million tonnes to set a new record in the ongoing 2011-12 crop year, boosted by a good monsoon and a likely rise in support prices”.

During 2010-11 crop year (July-June), production stood at 85.93 million tonnes. 'Indications are that Rabi sowing will be good, particularly of wheat. As of now, it looks that wheat production will exceed 86 million tonnes,' Pawar said.

Pawar pointed that the good monsoon has boosted soil moisture and water levels in reservoirs and this would lead to a rise in production. A possible hike in the minimum support price (MSP) of wheat will encourage farmers to increase the area under the crop.

The Agriculture Minister hinted that in the coming days, the Cabinet may soon decide to increase the MSP of Rabi crops, which includes wheat, a Rabi season crop.

During the 2011-12 marketing year (April to March), the MSP for wheat stood at Rs 1,170 per quintal. The government buys wheat from farmers at the MSP.

Recently, the Agriculture Secretary P K Basu had expressed similar views on the achieving wheat production targets. He had said that wheat output of 86 million tonnes could be easily achieved if there is no rust disease and terminal heat. Wheat crop prospects are expected to be encouraging as reports say there would be abundant sunshine and no pest menace in wheat fields during the Rabi season.

The farmers are preparing their fields to sow wheat, the main Rabi crop. Planting of wheat would start in Madhya Pradesh and after that other major producing states such as, Punjab and Haryana. The other Rabi season crops are mustard, gram, peas and barley.

The S&P CNX Nifty opened at 5,057.35; about 20 points lower compared to its previous closing of 5,077.85, and has touched a high and a low of 5,101.75 and 5,056.60 respectively.

The index is currently trading at 5,084.10, higher by 6.25 points or 0.12%. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 1.81%, Jindal Steel up by 1.69%, Tata Power up by 1.62%, Grasim up by 1.35% and NTPC up by 1.18%.

On the flip side, DLF down by 3.71%, Sesa Goa down by 3.49%, Tata Steel down by 3.00%, Maruti Suzuki down by 2.39% and Coal India down by 2.12%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite was down 26.76 points or 1.10% to 2,412.03, Hang Seng was down 261.64 points or 1.39% to 18,496.17, Jakarta Composite was down 14.20 points or 0.39% to 3,661.18, KLSE Composite was down 5.50 points or 0.38% to 1,439.37, Nikkei 225 was down 66.36 points or 0.75% to 8,756.89, Straits Times was down 6.61 points or 0.24% to 2,727.36 and Taiwan Weighted was down by 55.84 points or 0.75% to 7,372.49.

On the flip side, Seoul Composite was up by 0.32 points or 0.02% to 1,823.42.