Sugar scrips gained by as much as 8.5 per cent in a relatively weak market on Thursday following the Government's move to remove curbs on exports.
A high-level ministerial meeting chaired by Prime Minister, Dr Manmohan Singh, decided to remove quantitative restrictions on sugar exports on Wednesday night.
The move triggered a rally in sugar stocks on Thursday morning on expectations of improved profitability in the sector on higher exports. Sugar companies are seen benefitting from the Government's latest move as global prices, though on a downward trend, are relatively still higher than domestic prices.
The Oudh Sugar gained the maximum of 8.5 per cent on the NSE to close at Rs 25.50. Mawana Sugars gained 7.25 per cent to close Rs 14.02 on the BSE. Dharani Sugars & Chemicals gained 6.8 per cent to close at Rs 27.50 on the NSE.
Other major gainers include Rajshree , Dhampur , Shree Renuka Sugars, Sakthi Sugars and Simbhaoli Sugars Ltd.
The benchmark BSE Sensex ended 0.87 per cent lower at 17,151 on weakening rupee and rising concerns over fiscal and economic challenges.
Rajshree Sugars gained 5.19 per cent to close at Rs 39.50, while Dhampur ended 4.95 per cent higher at Rs 48.95 on the BSE. Shree Renuka gained 4.4 per cent to end at Rs 32.2 and some 26.58 lakh shares of the company were traded on Thursday.
Simbhaoli Sugars gained 3.33 per cent to end at Rs 31, while DCM Shriram closed with a gain of 2.63 per cent at Rs 39. Triveni Engineering gained 2.69 per cent to close at Rs 15.29 on the BSE.
Bajaj Hindusthan, Balrampur Chini, Bannari Amman Sugars and KCP Sugars ended higher with a gain of over one per cent.
The removal of export curbs will help these companies to liquidate their surplus stocks and cut inventory costs. India is expected to produce 26 million tonnes of sugar this year. As of April 30, sugar production has already crossed 25.1 million tonnes. While the domestic consumption is pegged at 22 million tonnes, industry estimates a surplus of around 4 million tonnes.