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After opening the day on a positive note, the Indian stock markets have continued to trade in the green. Sectoral indices are trading on a positive note with stocks from the realty, auto and banking sectors leading the gains.
The BSE Sensex is trading up 118 points (up 0.4%) and the NSE Nifty is trading up 25 points (up 0.3%). The BSE Mid Cap index is trading up by 0.3%, while the BSE Small Cap index is trading up 0.6%. The rupee is trading at 67.16 to the US$.
As per a leading financial daily, the government has imposed a 20% duty on the export of raw sugar. The move is initiated in a bid to keep the domestic prices of sugar under check in India.
As per the government notification issued yesterday, 20% export duty has been levied on the export of white or refined sugar.
The duty is, however, lower than the 25% proposed by the Food Ministry. Food Minister Ram Vilas Paswan had recently hinted that India is planning to introduce a 25% tax on sugar exports in order to maintain local sugar supplies that are going to decline due to a drought in major growing regions.
The minister had said that the levy is aimed at curbing the county's exports and would help in keeping local prices under control in domestic markets.
According to US Department of Agriculture (USDA) figures, India exported 2.9 million tonnes (MT) of sugar in 2015-16, accounting for 5.3% of world exports.
Reports released early this financial year had stated that the output of sugar is projected to be the lowest in five years in FY17 due to two consecutive years of drought.
A fall in sugar production, both in India and globally, has led to a rise in sugar price. And sugar companies are making the most of this drought driven supply shortage and are earning higher realisations. Stocks of these companies too have surged in the past couple of months. However, will sugar stocks continue this uptrend and continue to offer high returns? Our recent premium edition of The 5 Minute WrapUp titled Sugar Stocks: Will the Sweet Gains Last? answers this.
In a major global development, the death of a British Member of Parliament, who was shot dead yesterday, lowered the Brexit bets and helped global stocks cut losses.
As per an article in the Economic Times, a British pro-EU Labour Party MP was shot dead on Thursday evening, forcing the authorities to suspend campaigning for either camps till the vote. The event led market participants lower their bets in favor of Brexit.
All eyes are now on the UK EU referendum that is scheduled on 23rd June.
On June 23, UK will vote on whether to remain in the 28-nation European Union (EU) or to leave. Britain's exit from the EU (Brexit) is in the news globally as it could have major implications for the international financial market and exchange rates.
A recent entry in Vivek Kaul's Diary gives a bird's eye view of Brexit and explains how the European Union has fed into the Brexit sentiment.
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