Mumbai - Under-pressure from sharp overnight losses in the US cotton futures, cotton futures shed previous gains and slipped into the negative area amid speculative selling on both the domestic exchanges Thursday. While NCDEX April cotton dropped Rs 4.10/20kg, MCX April cotton went down Rs 2.80/20kg. Weaker domestic spot markets across the country have also worsened sentiments for the cotton futures.

ICE Futures US cotton prices sank to pre-rally levels in a continued sell-off Wednesday as funds liquidated commodities holdings across the board on economic uncertainty, analysts said. May cotton settled 300 points lower at 72.02 cents a pound, and the July contract also ended down 300 points at 74.23 cents.

At the domestic spot markets Wednesday, cotton lint continued to trade weaker slipped further by Rs five/maund amid limited demand from millers across northern India. Around 8,000 bales of kapas arrived in the northern region today.

Traders say, buyers are avoiding fresh deals looking at the decreasing prices. Ginners also preferring to hold stocks rather than releasing in the market. The demand is being met by the daily arrivals only. According to the Cotton Corporation of India (CCI), around 2.60 crore bales of cotton arrived in the markets across the country as of March 15.

Across western India, cotton lint prices remained steady amid sluggish demand at the spot markets. The main buyers have stopped buying following recent sharp downfall in the markets.

At 10.42 am IST, NCDEX benchmark April cotton contract dropped Rs 4.10 to trade at Rs 511.00/20kg, after fluctuating in the range of Rs 506.20 and 513.20/20kg. Open interest in April cotton was 2,879 lots. Trading has not started yet in the NCDEX March cotton contract, the settlement of which is due today.

MCX April-08 contract traded down Rs 2.80 at Rs 489.30/20kg.