*By Rutam Vora *Indian markets reeled lower with commodity stocks plunging in early trading hours on the Bombay Stock Exchange (BSE) Wednesday. Sugar stocks led the fall while Tyre stocks remained under pressure due to peaking up rubber prices.
The key benchmark index, Sensex fell by 0.98% at 17386.08 points at 11.03 hours this morning. Sectoral indices including BSE Metals, BSE Auto and BSE Realty shed losses, while FMCG and oil & gas indices successfully maintained positive trend. India's monsoon rains during June 1 to June 30 were reported to be 15% below normal. Monsoon has not made any progress northward for more than 10 days, however, India Meteorological Department (IMD) estimation indicated that fresh showers may hit part of the northern region in next four to five days. ‘Rains are unlikely to advance across remaining parts of the eastern and central regions during the next two-to-four days,’ the government's weather office said Tuesday. *Sugar stocks turn bitter* The concern over monsoon seems to have affected sugar stocks on the bourses, which fell by more than 1.5% on BSE Wednesday. Stocks continued slide for a second consecutive day after witnessing heavy selling on Tuesday. Leading sugar firms, Shree Renuka Sugars Ltd (BOM:532670), Dhampur Sugar Mills Ltd (BOM:500119) and Uttam Sugar Mills Ltd (BOM:532729) lost by over 1.5% each in the early trading hours on the BSE today. Bajaj Hindusthan (BOM:500032), Sakthi Sugars Ltd (BOM:507315) and Oudh Sugar Mills Ltd (BOM:507260) slipped by over 1% each in the early trading hours on BSE today. According to Ministry of Agriculture’s data, India’s sugar production for the crop year 2010-11 (Oct-Sep) is expected to touch 23 million tonnes. Meanwhile, India’s 2009-10 sugar output is seen at 18.8 million tonnes, higher from previous estimates, as late rains helped improve sugarcane yield. The government has reduced the time allowed for the re-export of white sugar processed from imports of tax-free raw sugar by nine months to March 31. On the international markets, Sugar futures on ICE ended mixed Tuesday with the July contract up on short covering while October contract fell tracking other commodities on the back of negative Chinese and U.S. economic data. *Wearing out rubber stocks* Rubber stocks reeled under selling pressure as the natural rubber prices hit all time high on the leading rubber trading exchange, National Multi Commodity Exchange (NMCE). The price hit all time high of Rs.173 a kg on the exchange recently. The poor crop scenario in India as well as in the international market took a toll of the rubber consumers. However, production may improve this year as the latest Rubber Board data indicated that India's area under rubber plantation may rise 3% in the current fiscal year as farmers are encouraged by its record-high prices. On the BSE, tyre maker, JK Tyre & Industries Ltd (BOM:530007) fell the most by over 1.2%, while Apollo Tyres Ltd (BOM:500877), Ceat Ltd (BOM:500878) and Goodyear India Ltd (BOM:500168) fell by over 0.5% on the bourses in the morning trades on Wednesday. While large-cap tyre makers reeled under selling pressure, small-cap tyre stock Krypton Industries Ltd (BOM:523550) was locked at Rs.36.30 with loss of 4.47%. *Oil refiners maintain cheer * Crude Oil prices fell on Tuesday on receding consumer confidence in the economic recovery, which set off concerns about gasoline demand for the busy summer season. The prices fell by $2.31, or 3% to settle at $75.94 on the New York Mercantile Exchange (NYMEX). On the domestic front, the Prime Minister of India, Manmohan Singh on Tuesday endorsed fuel price hike and hinted at Diesel prices to go the petrol-way. This fuelled positive sentiment for oil refineries in India and led to increased buoyancy in the stocks. Public sector oil refiners, Indian Oil Corporation Ltd (BOM:530965) and Bharat Petroleum Corporation Ltd (BPCL) (BOM:500547) gained over 2.3% each, while Hindustan Petroleum Corporation Ltd (HPCL) (BOM:500104) jumped by close to 5% on the BSE today. Private sector major, Essar Oil Ltd (BOM:500134) gained over 2%, while Index heavyweight, Reliance Industries Ltd (BOM:500325) gained close to 1.5% creating overall optimism in oil sector. *Metal stocks in a mixed bag* Metal stocks maintained mixed movement on the bourses on Wednesday with leading steel stocks sinking in red with moderate to marginal losses. However, other base metal stocks maintained positive trend on BSE today. Meanwhile, three month copper on LME was tad up Wednesday on short covering after sharp declines in overnight trade. Copper majors, Sterlite Industries Ltd (BOM:500900) and Hindalco Industries Ltd (BOM:500440) remained negative on Wednesday with Sterlite falling 0.5%, while Hindalco losing by 1.5%. Nissan Copper, however, maintained positive trend with gains of over 2% The sectoral index, BSE Metals remained weak with marginal loss of 0.68% at 14536.44 points. Steel stocks including, Tata Steel Ltd (BOM:500470), Bhushan Steel Ltd (BOM:500055) lost around 0.5% each, while public sector steel major, SAIL (BOM:500113) lost by over 1% in the morning trades. -- Regards Hardik Shah -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
