Benchmarks continue to trade in red in noon session

Indian bourses continued to trade in red in the noon session on sustained capital outflows by foreign funds and selling by retail investors amid weak trade in global markets. Foreign institutional investors were net sellers in equities worth Rs 707 crore on November 03, 2016. However, investors got some comfort with report that in a four-tier GST tax structure of 5, 12, 18 and 28 per cent that aims to lower tax incidence on most goods and keep out essential items was decided by a high-powered council, a major breakthrough for rollout of the Goods and Services Tax regime from April 1 next year. According to Chief Economic Advisor Arvind Subramanian, the GST Council’s decision to peg the tax rate on items of mass consumption at 5 per cent will bring down prices and soften inflation. Besides, appreciation in rupee against the dollar too helped markets to restrict losses. Indian rupee recovered by 3 paise to 66.72 against the dollar in early trade on mild selling of the US currency by exporters. Meanwhile, additional pressure witnessed in Pharma stocks after the report that US prosecutors are conducting an investigation over price collusion. On the other hand, Shares of cigarette makers such as ITC, Godfrey Phillips India and VST Industries rallied after the Goods and Services Tax (GST) Council's propose to place tobacco products in the 28% tax slab and an additional cess.

On the global front, Asian markets were trading mostly lower on Friday, with Japanese shares leading losses, as investors flocked to safe-haven assets amid worries about the US election. The most recent market jitters over the race to the White House started in earnest a week ago, after the Federal Bureau of Investigation (FBI) said it was investigating new emails related to Democratic nominee Hillary Clinton's use of a private server when she was secretary of state. Following news about the FBI's investigations, some polls showed the presidential race in battleground states was tight, with Republican nominee Donald Trump appearing to gain some ground. The yen, which is considered a safe haven asset, strengthened against the dollar to trade as high as 102.81 on Friday. Relative strength in yen pushed major Japanese exporters lower. Meanwhile, some comfort came from china as Chinese Finance Minister Lou Jiwei stated that the country is actively pushing forward reforms on property taxes as it overhauls its fiscal system. Any progress on expanding the tax would be a major development in China’s red-hot housing market.

Back home, stocks from FMCG and information technology (IT) counters were supporting the markets, while those from Realty, Metal and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, JSPL declined after the report that the company failed to pay Rs 15.43 crore towards the interest due on Non Convertible Debentures (NCDs) on October 31, 2016. On the other hand, Tata Motors gained after the company singed memorandum of understanding (MoU) with Indonesia's state-owned enterprise PT Pindad to explore market potential of Tata-armoured vehicles in Indonesia and other agreed regions of ASEAN.

The market breadth remained pessimistic as there were 446 shares on the gaining side against 2131 shares on the losing side, while 95shares remained unchanged.

The BSE Sensex is currently trading at 27364.61, down by 65.67 points or 0.24% after trading in a range of 27300.02 and 27498.91. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.56%, while Small cap index down by 2.66%.

The few gaining sectoral indices on the BSE were FMCG up by 1.89%, IT up by 0.23% and TECK up by 0.02%, while Realty down by 2.59%, Metal down by 2.44%, Capital Goods down by 1.54%, PSU down by 1.50% and Oil & Gas down by 1.36% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 4.35%, Hindustan Unilever up by 1.94%, NTPC up by 1.41%, Asian Paints up by 1.07% and Mahindra & Mahindra up by 1.06%. On the flip side, Sun Pharma down by 6.48%, Dr. Reddys Lab down by 5.37%, Lupin down by 5.00%, Coal India down by 3.01% and Maruti Suzuki down by 2.06% were the top losers.

Meanwhile, with an aim to protect domestic manufacturers and cut down imports, the Finance Ministry has imposed provisional anti-dumping duty on import of hot rolled steel products (bars and rods) from China. This anti-dumping duty will be valid for a period of six months.

The decision was taken in line with the recommendation of the Directorate General of Anti-Dumping (DGAD). As per its notification, an anti-dumping duty equivalent to the difference between the landed value of steel products and $499 per tonne will be imposed on products exported by Minmetals Yingkou Medium Plate Co. In case of other producers, the anti-dumping duty would be the difference between the landed value and $538 per tonne. The 'landed value' of imports was defined as the assessable value as determined by the customs and includes all duties of customs.

DGAD said that the product has been exported to India at below the normal value due to which the domestic industry has suffered material injury. He said that the injury has been caused by the dumped imports of the subject goods from the subject countries. Further, it said that the imports of these steel products have drastically increased to 4,95,732 tonnes during the period of investigation (July-December 2015) from 1,60,582 tonnes in 2012-13. India has already slapped anti-dumping duty on certain cold-rolled flat steel products from four countries including China and South Korea.

The CNX Nifty is currently trading at 8452.15, down by 32.80 points or 0.39% after trading in a range of 8432.50 and 8504.00. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were ITC up by 4.41%, HCL Tech up by 2.10%, Hindustan Unilever up by 1.88%, NTPC up by 1.18% and Asian Paints up by 1.03%. On the flip side, Sun Pharma down by 6.45%, Lupin down by 4.89%, Dr. Reddys Lab down by 4.86%, Aurobindo Pharma down by 3.74% and Bharti Infratel down by 3.71% were the top losers.

Asian markets were trading mostly in the red; Nikkei 225 declined 1.47%, Jakarta Composite shed 0.41%, Hang Seng slipped 0.14%, KOSPI Index dipped 0.18%, Shanghai Composite declined 0.08% and FTSE Bursa Malaysia KLCI was down by 0.12%. On the flip side, Taiwan Weighted was up by 0.01%.