Markets recoup early losses to trade in green

Indian equity indices recovered all the losses and entered into positive territory in late afternoon session on fresh buying by investors in selected blue-chip counters amid firm trade in European markets. Both, Sensex and Nifty regained their crucial 26,300 and 8,100 level respectively. Sentiments got some support with Prime Minister Narendra Modi’s statement that India's economy is expected to witness a five-fold growth by 2040 owing to increase in investments. He added that the government expects growth in manufacturing, transport and civil aviation among other sectors. Sentiments also got support with the private report stating that the RBI monetary policy committee (MPC) is likely to consider a 25 bps rate cut on Wednesday, followed by another in the first quarter of 2017 amid downside risks to growth following the notes ban and subdued inflation. On the global front, European markets recovered early losses on Monday as investors’ shrugged off the outcome of the Italian constitutional referendum. Investors had widely anticipated the referendum result and subsequent resignation of Prime Minister Matteo Renzi.

The BSE Sensex is currently trading at 26341.10, up by 110.44 points or 0.42% after trading in a range of 26125.35 and 26376.47. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.60%, while Small cap index was up by 0.23%.

The top gaining sectoral indices on the BSE were Auto up by 1.88%, FMCG up by 1.41%, Metal up by 0.89%, Bankex up by 0.53% and PSU up by 0.37%, while IT down by 0.43%, TECK down by 0.21%, Consumer Durables down by 0.12%, Capital Goods down by 0.10% and Power down by 0.10% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.25%, Lupin up by 3.22%, Asian Paints up by 2.98%, Bharti Airtel up by 2.71% and Maruti Suzuki up by 2.30%. On the flip side, HDFC down by 1.58%, Power Grid down by 1.47%, TCS down by 1.18%, GAIL India down by 0.81% and Wipro down by 0.47% were the top losers.

Meanwhile, in a bid to support the domestic steel industry suffering from cheap imports, the government has decided to extend further the Minimum Import Price (MIP) regime on 19 colour-coated and galvanised steel products by another two months till February 4, 2017. The 19 products include semi-finished products of iron or non-alloyed steel, flat-rolled products of different widths, bars and rods. The MIP ranges between $643-752 per tonne.

The Directorate General of Foreign Trade, under the ministry of commerce and industry, notified that “As per the applicable laws and powers conferred to the department by the government of India, the period of MIP has been extended on 19 steel products by two months till 4 February.” 

Government in February had imposed MIP, ranging between $341 to $752 per tonne on 173 steel products for a period of six months, in order to guard domestic steel producers against cheap in-bound shipments. Later, in August it decided to extend the MIP on 66 steel products for a period of two months as against 173 items earlier.

Indian Steel Association had asked the government to extend MIP on certain products by saying its imposition has marginally improved the industry’s viability after a long period of subdued prices. Accelerating imports at predatory prices from steel surplus countries like China, Japan and Korea have been a major concern area for the domestic industry since September 2014. However, despite repeated pleas by the industry, the steel ministry was not in favour of the extension of the MIP for 30 semi-finished products such as slabs and billets, in October as imports of these items have been negligible. Also, there are fears of huge backlash in the international arena from WTO non-compatible measures like MIP.

The CNX Nifty is currently trading at 8126.20, up by 39.40 points or 0.49% after trading in a range of 8056.85 and 8136.65. There were 33 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Lupin up by 3.25%, Mahindra & Mahindra up by 3.15%, Asian Paints up by 3.03%, Bosch up by 2.95% and Bharti Airtel up by 2.79%. On the flip side, Tech Mahindra down by 2.42%, HDFC down by 1.51%, Power Grid down by 1.41%, Grasim Industries down by 1.12% and Idea Cellular down by 1.09% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 151.09 points or 0.82% to 18,274.99, Hang Seng dropped 59.27 points or 0.26% to 22,505.55, Shanghai Composite slipped 39.13 points or 1.21% to 3,204.71, Taiwan Weighted declined 28.83 points or 0.31% to 9,160.66 and KOSPI Index was down by 7.25 points or 0.37% to 1,963.36. On the other hand, FTSE Bursa Malaysia KLCI increased 0.73 points or 0.04% to 1,629.69 and Jakarta Composite was up by 28.92 points or 0.55% to 5,274.87.

All the European markets were trading in green; UK’s FTSE 100 surged 35.49 points or 0.53% to 6,766.21, France’s CAC jumped 43.72 points or 0.97% to 4,572.54 and Germany’s DAX was up by 167.43 points or 1.59% to 10,680.78.