Weak trade persist in late afternoon session

Indian equity benchmarks continued their trade in red in the late afternoon session on account of weakness in global counterparts which hit market’s sentiment adversely. Fear of Britain exit from euro zone is causing volatility in markets. Weak industrial production data for April 2016 released by the government after market hours on Friday also weighed on the sentiment. Investors maintained cautious approach ahead of key macroeconomic data i.e. consumer price index (CPI) and inflation based on the wholesale price index (WPI) for May scheduled to be released today and tomorrow, respectively. Traders were seen piling position in FMCG stocks while selling was witnessed in Realty, Bankex and Power sector stocks. In scrip specific development, Amtek Auto was trading in green on reports that the company is close to selling its profitable German unit for about $700 million to a foreign buyer in order to cut its debt. Shares of aviation firms SpiceJet, Jet airways and InterGlobe Aviation were trading in red after the Civil Aviation ministry proposed changes to civil aviation requirements to be followed by aviation firms which could result in increase in costs for aviation firms.

On the global front, the Asian markets were trading in red while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,150 and 26,400 levels respectively. The market breadth on BSE was negative in the ratio of 875:1549 while 155 scrips remained unchanged.

The BSE Sensex is currently trading at 26377.60, down by 258.15 points or 0.97% after trading in a range of 26262.27 and 26468.27. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.77%, while Small cap index down by 0.65%.

The gaining sectoral indices on the BSE were FMCG up by 0.01% while, Realty down by 1.55%, Bankex down by 1.53%, Power down by 1.33%, Auto down by 1.32% and Metal down by 1.30% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 1.07%, Lupin up by 0.90%, Dr. Reddy’s Lab up by 0.68%, Coal India up by 0.52% and Sun Pharma up by 0.32%.

On the flip side, Tata Motors down by 3.65%, ICICI Bank down by 3.62%, Tata Steel down by 3.48%, BHEL down by 2.59% and SBI down by 2.21% were the top losers.

Meanwhile, to make things easier for the importers and in a bid to push its Make in India initiative, the government is likely to announce a scheme to extend single port clearance, deferred duty payment and relief from routine checks for select importers. The new scheme will have a benefits matrix, extending most of the benefits, including assured clearance from ports, to direct manufacturers in India.

The Finance Ministry expanding the scope of two existing programmes for importers, the Accredited Clients Programme (ACP) and the Authorised Economic Operator (AEO) scheme will be combining them, which will extend direct port transfers and allow members to move their cargo as it arrives at a land or sea port to a warehouse without checks. An AEO programme offers members reduced examination and inspection, higher facilitation than ACP clients, and acceptance of pre-arrival import declarations. This move is aimed to cut time and cost for importers and boost domestic production.

Importers in the revamped AEO scheme and bringing in shipments by the 15th of a month will get to make payments by a particular date of the second fortnight. Similarly, those bringing in consignments during the second fortnight will have to make payments by a specified date at the beginning of the second month. Only members of the revamped scheme will be eligible for deferred payment benefits. It has been reported that the government will be dividing a month into two.

Also, in order to encourage medium and small enterprises to be a part of the scheme, the government will probably do away with the eligibility criterion of Rs 10 crore of imports in the earlier financial year. Further, under the revamped scheme, there will be no value thresholds and minimum documentation will be required. Though manufacturers will be given preference, traders will not be barred. The government is easing the minimum import norms, without making the scheme weak as in earlier scheme the entry norms were tough and not many was able to qualify.

The CNX Nifty is currently trading at 8101.50, down by 68.55 points or 0.84% after trading in a range of 8063.90 and 8125.25. There were 15 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 1.48%, BPCL up by 1.32%, Lupin up by 0.93%, Aurobindo Pharma up by 0.84% and Coal India up by 0.75%.

On the flip side, ICICI Bank down by 3.74%, Tata Motors - DVR down by 3.73%, Tata Motors down by 3.59%, Tata Steel down by 3.47% and Idea Cellular down by 3.33% were the top losers.

The Asian markets were trading in red; Nikkei 225 decreased 582.18 points or 3.51% to 16,019.18, Hang Seng decreased 529.65 points or 2.52% to 20,512.99, Taiwan Weighted decreased 179.26 points or 2.06% to 8,536.22, Shanghai Composite decreased 94.09 points or 3.21% to 2,833.07, KOSPI Index decreased 38.57 points or 1.91% to 1,979.06, Jakarta Composite decreased 31.43 points or 0.65% to 4,816.63 and FTSE Bursa Malaysia KLCI decreased 10.31 points or 0.63% to 1,630.91.

The European markets were trading in red; UK’s FTSE 100 decreased 22.92 points or 0.37% to 6,092.84, Germany’s DAX decreased 106.39 points or 1.08% to 9,728.23 and France’s CAC decreased 39.61 points or 0.92% to 4,267.11.