Markets continue firm trade in afternoon session

Indian equity benchmarks continued to trade firm in afternoon session led by gains in frontline blue chip stocks including SBI, Gail India and SSLT amid expectations of an improvement in economic growth during the Jul-Sep quarter of current fiscal. Investors’ sentiments were got a boost as Deputy Chairman of the Planning Commission Montek Singh Ahluwalia said that India will become the third-biggest economy in the world by 2030. Further, sentiments also got support from Economic Affairs Secretary Arvind Mayaram's  statement  that country’s fiscal deficit will remain within set target at 4.8 percent of GDP for current fiscal as the government is taking various measures to maximize revenues. All indices were trading in green on BSE with bankex being the top gainer on BSE up by nearly 1.95% followed by metal and PSU both up by over 1.50%. On stock specific movement, SSLT, SBI and Gail India were trading up by nearly 2.5% higher, while, M&M and Wipro were trading marginally lower on BSE.

Among other stocks, NHPC was trading higher by 2.2% after the company’s share buyback begins today with a program of 1,230 million shares at a price of Rs 19.25 per share on a proportionate basis through the Tender Offer Process. Shoppers Stop rallied 10% after the IDFC Mutual Fund acquired around one million shares of a leading retail stores for Rs 32 crore through open market. Jubilant Life Sciences is trading higher by over 6% on BSE after the pharmaceutical company said it has received approval from the US health regulator to market some specific generic drugs.

On global front, Asian markets were trading in red with Shanghai Composite down by 0.14% and Seoul Composite down by 0.17% as investors turned cautious and booked profits after recent gains. Back home, the NSE Nifty and BSE Sensex were trading up their psychological 6,100 and 20,500 levels respectively. The market breadth on BSE was positive, out of 2,121 stocks traded, 1,301 stocks advanced, while 700 stocks declined on the BSE. 

The BSE Sensex is currently trading at 20,769.83 up by 234.92 points or 1.14% after trading in a range of 20,819.77 and 20,558.93. There were 28 stocks advancing against only 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.94%, while Small cap index up by 0.75%.

The gaining sectoral indices on the BSE were Bankex up by 1.95%, Metal up by 1.52%, PSU up by 1.48%, Realty up by 1.46% and FMCG up by 1.17%.

The top gainers on the Sensex were SSLT up by 3.85%, SBI up by 2.77%, Gail India up by 2.74%, ICICI Bank up by 2.34% and Cipla up by 2.03%. On the flip side, M&M down by 0.06%, and Wipro down by 0.04%.

Meanwhile, Concerned over the farmers’ backlash with sugar mills not buying standing sugarcane crops and in order to resolve the issue of sugarcane pricing, the UP government has announced tax waiver on entry tax and purchase tax for cash-starved sugar mills in order to soften the high procurement price. Meanwhile, the government has also warned sugar millers to start crushing by December 4 or face legal action.

Recently, 99 private mills out of the state's 122 sugar mills in Uttar Pradesh (UP), the country’s second largest producer region, had refused to operate due to the high cane price of Rs 280 per quintal fixed by the state for 2013-14 marketing year (October-September). The sugar mills want cane prices below Rs 225 per quintal. On the other hand the government has said that Rs 280 per quintal to be paid to farmers was not negotiable and thus announced tax sops to ease the cost of sugar mills. The state government has also decided to set up a committee to look into all aspects related to fixing of sugarcane prices, including linkage of cane price with sugar prices. The state government will fix state advisory price (SAP) of cane from 2014-15 marketing year onwards.

At present, domestic sugar industry is facing financial problems owing to the increase in cost of production and sharp fall in domestic sugar prices on account of surplus supplies. The country's sugar production is likely to drop by nearly three percent to 24.4 million tonnes, but sufficient to meet the present domestic demand at about 22 million tonnes. Furthermore, the Food Ministry will soon seek Cabinet nod for providing interest-free loans to cash-starved sugar mills to help them meet working capital requirements. The ministry wants to pay the interest accrued on loans from the sugar development fund, which is around Rs 12,000 crore.

The CNX Nifty is currently trading at 6,166.75 up by 74.90 points or 1.23% after trading in a range of 6,182.40 and 6,103.80. There were 48 stocks advancing against 2 declining on the index.

The top gainers of the Nifty were SSLT up by 3.97%, NMDC up by 3.45%, JP Associates up by 3.13%, SBI up by 2.84% and Gail India up by 2.82%. On the flip side, M&M down by 0.12%, and Asian Paints down by 0.07% were the major losers on the index.

The Asian equity indices were trading in red; Shanghai Composite down by 0.14%, Seoul Composite down by 0.17%, Nikkei 225 down by 0.54%, Straits Times down by 0.41%, and Jakarta Composite down by 0.04%. While, Taiwan Weighted up by 0.53%, Hang Seng up by 0.27% and KLSE Composite up by 0.01%.