Benchmarks trade slightly in the red in early deals

Indian equity benchmarks have made a choppy start and are trading slightly in the red in early deals on Wednesday as investors take some profit off the table after recent gains. Traders remained concerned with Asian Development Bank saying that a global failure to respond to climate changes could result in about 8.7 percent economic loss in India`s Gross Domestic Product (GDP) by 2100. Also, the Indirect tax mop up inched up merely by 3.9 percent in the April-July quarter of the current fiscal due to decline in custom duty and excise duty collections. The growth is far less than 25 percent annual increase envisaged in the Budget.

On the global front, the US markets extended their upward trend in last session on the back of two good reports on consumer price inflation and new residential construction. The gains once again lifted the tech-heavy Nasdaq to a new fourteen-year closing high. The Asian markets too were trading mostly in the green at this point of time and the regional indices are trading near six-year high as concern eased over global political conflicts.

Back home, on the sectoral front, technology, infrastructure and software witnessed the maximum gain in trade, while fast moving consumer goods, realty and auto remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1173 shares on the gaining side against 719 shares on the losing side while 78 shares remain unchanged.

The BSE Sensex opened at 26496.29; around 76 point higher compared to its previous closing of 26420.67, and has touched a high and a low of 26504.52 and 26376.37 respectively. The BSE Sensex is currently trading at 26412.73, down by 7.94 points or 0.03%. There were 16 stocks advancing against 14 stocks declining on the index.

The overall market breadth remained in the favour of advances with 59.54% stocks advancing against 36.50% declines. The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index up by 0.75%.

The gaining sectoral indices on the BSE were TECK up by 0.38%, Infrastructure up by 0.37%, IT up by 0.30%, Metal up by 0.23% and Power was up by 0.22%, while FMCG down by 0.45%, Realty down by 0.27%, Auto down by 0.26%, Consumer Durables down by 0.23% and Capital Goods was down by 0.21% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 1.61%, Sun Pharma Industries up by 1.58%, Wipro up by 1.31%, Bharti Airtel up by 0.97% and Hindalco was up by 0.97%. On the flip side, ONGC down by 0.87%, Hero MotoCorp down by 0.86%, SBI down by 0.78%, Hindustan Unilever was down by 0.76% and ITC down by 0.72% were the top losers.

Meanwhile, in order to provide relief to domestic producers, the Government has imposed safeguard duty on the import of seamless pipes and tubes, which are used in equipment for oil exploration, power generation, and bearing industry among others. Safeguard and anti-dumping duty are imposed to revitalize domestic industry from excessive or cheap import. Decision to impose safeguard duty has been taken after a petition filed by the domestic producers against the high imports from china and other countries. The domestic produces also stated that despite increase in the price of raw materials, importers were bringing their product at cheaper price, which is affecting the domestic industry.

The move is likely to provide benefit to domestic seamless pipes and tubes produces like Jindal Saw and ISMT. While, Indian firms like BHEL, ONGC and Oil India are among the largest consumers of such products. Country’s total demand of seamless pipes and tubes stood at around 5,84,098 tonnes in FY13 out of which 64% of India total demand was met through the imports.  

The Central Board of Excise and Custom (CBEC) notified that safeguard duty will be imposed at the rate of 20 percent in the first year (August 13, 2014-August 12, 2015), 10 per cent in the second year (August 13, 2015-August 12, 2016) and at the rate of 5 percent in the third year (August 13, 2016-February 12, 2017). This will not be applicable on imports from developing countries such as Indonesia, Malaysia, Thailand and South Africa, besides others.

The CNX Nifty opened at 7,915.80; about 18 point higher as compared to its previous closing of 7,897.50, and has touched a high and a low of 7,922.70 and 7,881.15 respectively.

The CNX Nifty is currently trading at 7894.60, down by 2.90 points or 0.04%. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Sun Pharma Industries up by 1.79%, Dr. Reddys Lab up by 1.58%, Wipro up by 1.15%, Bharti Airtel up by 1.02% and Hindalco was up by 0.91%. On the flip side, PNB down by 1.13%, IDFC down by 1.12%, Hero MotoCorp down by 1.01%, SBI down by 0.96% and Hindustan Unilever was down by 0.87% were the top losers.

Asian markets were trading mostly in the green; Nikkei 225 soared 6.35 points or 0.04% to 15,456.14, Hang Seng increased by 167.49 points or 0.67% to 25,122.95, Straits Times gained 13.82 points or 0.42% to 3,330.25, Jakarta Composite surged by 18.64 points or 0.36% to 5,183.81, FTSE Bursa Malaysia KLCI added 10.41 points or 0.56% to 1,872.16 and Taiwan Weighted was up by 24.37 points or 0.26% to 9,268.15.

On the flip side, KOSPI Index dropped 4.05 points or 0.20% to 2,067.09 and Shanghai Composite was down by 2.37 points or 0.11% to 2,242.96.