Benchmarks drift lower in early trade; IT weighs

Indian equity benchmarks are trading lower in early deals on Wednesday, as investors took some profits off the table in the wake of recent gains. Sentiments also remained dampened weighed down by selling pressure in software and technology stocks on profit booking after recent gains, while the appreciating rupee against the US dollar also dampened sentiment. Sentiments also got dampened after Finance Minister P. Chidambaram termed the rising number of bad loans in the banking sector as 'unacceptable,' even as he expressed satisfaction at the growth in bank lending in the first quarter.

On the global front, The US markets made a green closing, reacting positively to the weaker than expected September jobs report that reinforced expectations that the Federal Reserve will maintain its asset purchase program at the current pace, while most of the Asian counters turned red after a positive opening, as investors booked their profits at higher levels. Japanese Nikkei share average, having touched a three and a half week high earlier, declined by over a percent as a stronger yen took a heavy toll.

Back home, on the sectoral front, consumer durables witnessed the maximum gain in trade followed by metal and banking, while software, technology and auto remained the top losers on the BSE sectoral space. The broader, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 810 shares on the gaining side against 444 shares on the losing side while 44 shares remain unchanged.

The BSE Sensex opened at 20875.31; about 10 points higher compared to its previous closing of 20864.97, and has touched a high and a low of 20922.32 and 20716.50 respectively. The index is currently trading at 20800.21, down by 64.76 points or 0.31%. There were 13 stocks advancing against 17 declines on the index.

The overall market breadth has made a strong start with 62.06% stocks advancing against 34.49% declines. The broader indices were trading in green; the BSE Mid cap up by 0.43% and Small cap indices up by 0.44%. 

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.12%, Metal up by 0.86%, Bankex up by 0.55%, PSU up by 0.44% and Oil & Gas up by 0.07%, while IT down by 1.69%, Teck down by 1.26%, Auto down by 0.39% and FMCG down by 0.06% were the top losers on the sectoral index.

The top gainers on the Sensex were SSLT up by 2.92%, Gail India up by 2.91%, SBI up by 2.52%, Tata Power up by 1.77% and Hindalco Industries up by 0.73%. On the flip side, Wipro was down by 5.58%, Infosys was down by 1.49%, TCS was down by 1.21%, Tata Motors was down by 1.13% and Dr Reddys Lab was down by 0.86% were the top losers on the Sensex.

Meanwhile, Blame it on lower crushing and recovery levels in key producing states that the country’s sugar output dropped by 4.5% to 25.14 million tonnes in 2012-13 marketing year that ended last month as against 26.34 million tonnes of sugar output in the previous marketing year. However, despite the drop, the production was sufficient to meet the local demand, which increased by 3.6% to 22.8 million tonnes in the same period.

Further, data from Indian Sugar Mills Association (ISMA) showed that 2.5% less sugarcane was crushed in the 2012-13 crop season, while the all-India average recovery rate stood at 10.03% compared with 10.25% in the previous year.

Maharashtra, the country's largest sugar producing states, produced 7.99 million tonnes of sugar after crushing 70.1 million tonnes of sugarcane. While, sugar production dipped by 11% than last year, sugar crushing for the season was 98% lower. This dip was mainly on account of lower sugar recovery in 2012-13 at about 11.41%.

However, Uttar Pradesh produced 7.4 million tonnes of sugar and crushed 81.5 million tonnes of sugarcane, which was 7.3% more sugar than last year and 6% more than the sugarcane crushing last year respectively. Better sugar recovery than last year's of 9.07%, helped in giving slightly more sugar production. Notably, Maharashtra and Uttar Pradesh, together account for about 80% of the country's sugar production. Further, sugar production during 2012-13 marketing year stood at 3.46 million tonnes in Karnataka, 1.96 million tonnes in Tamil Nadu and 0.99 million tonnes in Andhra Pradesh.

The CNX Nifty opened at 6,209.55; about 6 points higher as compared to its previous closing of 6,202.80, and has touched a high and a low of 6,217.95 and 6,154.40 respectively. The index is currently trading at 6,182.20, down by 20.60 points or 0.33%. There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were Gail up by 2.89%, SBI up by 2.85%, SSLT up by 2.64%, Bank of Baroda up by 2.09% and Tata Power up by 1.77%. On the flip side, Wipro down by 5.59%, HCL Tech down by 2.16%, Infosys down by 1.66%, ACC down by 1.31% and Cairn down by 1.29% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite declined 25.79 points or 1.17% to 2,184.87, Hang Seng slipped 16.05 points or 0.07% to 23,299.94, Nikkei 225 dropped 181.33 points or 1.23% to 14,531.92, Seoul Composite shed 14.43 points or 0.70% to 2,041.69 and Taiwan Weighted was down by 26.14 points or 0.31% to 8,392.13.

On the flip side, Jakarta Composite surged 52.06 points or 1.15% to 4,564.81, KLSE Composite rose 11.09 points or 0.61% to 1,814.67 and Straits Times was up by 11.29 points or 0.35% to 3,221.50.