Stock market today: Why sugar stocks are nosediving — explained

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Stock market today: Sugar stocks are under pressure since early morning deals on Thursday. During opening bell today in Indian stock market today, sugar major Balrampur Chini share price witnessed near 6 per cent declie, Dwarikesh Sugar share price went down 4.50 per cent, Sakthi Sugars shares dipped around 4 per cent, Mawana Sugar stock price dashed ariound 3 per cent while Ugar Sugar crashed to the tune of 6 per cent. Shares of Bajaj Hindusthan Sugar Ltd and Avadh Sugar & Energy Ltd crashed over 6 per cent during morning session on Thursday.

According to stock market experts, sugar stocks are under pressure due to ethanol price reduction buzz. Experts said that due to dip in crude oil prices, ethanol prices have gone down in global merchandise and Indian market is expecting this price reduction in near term. As ethanol business is one of the major themes that has driven sugar stocks in recent few quarters, this news has triggered profit booking in sugar segment.

However, they said that sugar stock may rebound strongly if there is no rate cut in India in near term. Speaking on the reason the reason for slide in stock stock prices in India, Saurabh Jain, Vice President — Research at SMC Global Securities said, "market is speculating rate cut in ethanol prices in India after dip in crude oil prices. In fact, ethanol prices have already gone down in some countries like Brazil.

So, in the wake of lowering crude oil prices, ethanol prices are expected to go down in near term in India as well. That's why profit booking is taking place in Indian stocks today." SMC Global Securities expert said that weak crude oil prices are expected to bring petrol prices downwards. As ethanol is mixed with petrol, oil making companies are