While the markets ended in red on Wednesday, most sugar stocks bucked the trend with gains of as much as 4% for the session after the government decided to increase import duty to discourage cheap imports.
The government approved raising the import tax to 40% from 25%, following a decision by the Cabinet Committee on Economic Affairs (CCEA). It also scrapped a 12.36% excise duty on ethanol made from molasses that is used for blending with gasoline, effective from 2015-16 sugar seasons. A plan under which exporters were allowed to bring in duty-free raw sugar, has also been cancelled. The announcement is seen supporting falling sugar prices in the country.
Among individual stocks, Triveni Engineering rallied the most with a gain of 4.14% on the BSE, followed by EID Parry (3.25%) and Dhampur Sugar (2.21%). Intraday, stocks rallied anywhere between 3-7%. While Dhampur Sugar, Dwarikesh Sugar and Triveni Engineering gained more than 6% intraday, EID Parry (India), Bajaj Hindusthan, Balrampur Chini Mill and Rana Sugars climbed between 4-5%.
EID Parry witnessed huge surge in the traded volume. Over 20 lakh shares traded on BSE and NSE against 30-day combined average volume of 1.84 lakh shares. Balrampur Chini witnessed a three-fold jump in the trading activity while shares of Dhampur Sugar, Bajaj Hindusthan and Shree Renuka traded over two times their 30-day average volume.