Benchmarks recoup early losses; trade flat with negative bias

Recouping all the early losses, Indian equity markets were trading flat, albeit with negative bias as some traders engaged in bargain-buying activities ahead of European market’s opening. Additionally, mostly positive Asian counterparts also were aiding sentiment. On the global front, Asian stocks were mostly higher on Wednesday as wary investors took heart from the recovery overnight in U.S. markets, but there wasn´t much bounce to the rebound. Some account of caution was witnessed ahead of U.S. jobless data due on Friday. Closer home, near day’s high, while Sensex was trading past the psychological 20,200 level, Nifty was just shy of the crucial 6000 level. Meanwhile, broader indices outperforming larger peers were up with gains in the range of 0.25%-0.75%.

On BSE sectoral front, most of the sectoral indices were trading in green; nevertheless top gainers were stocks from Auto, Realty and Metal counters. On the flip side, Fast Moving Consumer Goods and Oil & Gas counters were the only pockets of weakness. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1102:704; while 40 shares remained unchanged.

The BSE Sensex is currently trading at 20202.87, down by 9.06 points or 0.04% after trading in a range of 20254.82 and 20076.10. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices continued to outperform; the BSE Mid cap index was up by 0.27%, while Small cap index up by 0.82%.

The gaining sectoral indices on the BSE were  Auto up by 1.39%, Realty up by 1%, Metal up by 0.70%, IT up by 0.53% and Teck up by 0.26%. While, FMCG down by 1% and Oil and Gas down by 0.18% were the losing indices on BSE.   

The top gainers on the Sensex were Coal India up by 2.33%, M&M up by 2.19%, Tata Steel up by 2.14%, Tata Motors up by 2.08% and Hindalco Industries up by 1.31%. On the flip side, BHEL down by 2.42%, ITC down by 1.95%, SSLT down by 1.24%, ICICI Bank down by 0.79% and Bharti Airtel down by 0.73% were the top losers on BSE.

Meanwhile, Amid differences of opinion between Food and Agriculture Ministries for providing incentives for raw sugar export, the Cabinet Committee on Economic Affairs (CCEA) has deferred decision on Food Ministry’s proposal for fixing subsidy for exports of raw sugar. Food Ministry has proposed cash subsidy of Rs 2,000 per tonne to the beleaguered sugar industry for export of four million tonnes of raw sugar for a period of two years. On the other hand, Agriculture Ministry is in favour of a reasonable subsidy not less than Rs 3,500 per tonne in order to provide major boost to the exports of raw sugar.

Food Minister K V Thomas stated that Committee of Secretaries of food, agriculture, commerce and finance ministries would meet soon to re-calculate the subsidy of raw exports. As per the Food Ministry proposal, total subsidy outgo will be around Rs 800 crore that will be adjusted from the Sugar Development Fund (SDF), while the government would have to bear Rs 1,400 crore if Agriculture Ministry’s demand is considered. Meanwhile, the government had already given subsidy of Rs 1,450 per tonne in 2007-08 to export six million tonnes of sugar and the current incentive is being worked on the same procedure.

However it would be difficult for India to export raw sugar as global prices are ruling much lower as against the domestic production cost of Rs 26,500 per tonne. Further, domestic sugar mills are facing cash crunch as sugar prices have come down below the cost of production in view of surplus supplies. Meanwhile, the government has been taking measures to improve cash flow of sugar mills. During December’2013, the government had approved Rs 6,600 crore interest-free loans to sugar industry for making payment to sugarcane farmers. 

The CNX Nifty is currently trading at 5,999.40, down by 1.50 points or 0.02% after trading in a range of 6,012.85 and 5,962.05. There were 26 stocks advancing against 21 declining on the index, while 3 stocks remained unchanged.

The top gainers of the Nifty were Ranbaxy up by 3.48%, Coal India  up by 2.31%, Tata Steel up by 2.27%, M&M up by 2.25% and Tata Motors up by 2%. On the flip side, BHEL down by 2.43%,  ITC down by 2.12%, JP Associates down by 1.54%, HCL Technologies down by 1.53% and SSLT down by 1.27% were the major losers on the index.

The Asian equity indices were trading mixed; Seoul Composite up by 0.42%, Nikkei 225 up by 1.23%, Straits Times up by 0.05%, KLSE Composite up by 0.24% and Jakarta Composite up by 0.41%. While, Shanghai Composite down by 0.82%, Hang Seng down by 0.90% and Taiwan Weighted down by 2.34%.