Indian benchmarks continue to trade in red in noon session

Indian bourses continued to trade in red in noon session as funds and retail investors engaged in reducing positions ahead of the February futures and options expiry on Thursday. Sentiments remained downbeat as the rating agency ICRA in its report said that the economy based on the gross value added (GVA) is set to slip to 6.2% in the December quarter from 6.9% a year ago and GDP growth will decline to 6.5% from 7.2%. The slippages will be driven by the slowdown in growth of the industry and services, offsetting the healthy agricultural expansion during the period. Furthermore, a private report indicated India's growth momentum witnessed a recovery in January but it is not broad-based and overall economic activity remains below pre-demonetisation levels. The slowdown that started in the October-December quarter of 2016, post demonetisation is spilling over into the first quarter of 2017 (January-March). However, losses remained capped with report that yearly SBI Composite Index (year-on-year) for February 2017 improving to 49.5 compared to last month’s index of 47.0, indicating some improvement in sentiments. The monthly Index though declined marginally to 49.2 in February 2017 from 50.9 in January 2017, which means IIP growth may continue to contract in January and February 2017. Some support also came with the report that the government hopes to overshoot the Rs 45,500 crore disinvestment target for the current fiscal amid strengthening of equity markets. Meanwhile, some steel stocks gained traction as the government has extended anti-dumping duty on import of certain steel products from China for five years with an aim to protect domestic players from the cheap shipments. The levy has been imposed in the range of $961.33 - 1,610.67.

On the global front, Asian markets were trading mostly higher on Tuesday, as investors looked ahead to minutes from the U.S. Federal Reserve’s latest meeting. Further, Japanese stocks edged up as the yen eased back against the dollar, although trading volumes were low as a holiday in the United States left investors short of the usual leads. Meanwhile, crude futures rose for the second day, with data showing hedge funds are betting big across oil markets following OPEC production cuts agreed last year.

Back home, stocks from Consumer Durables, Oil & Gas and Metal counters were supporting the markets, while those from Telecom, FMCG and Utilities counters were adding to the underlying cautious undertone. In scrip specific development, Firstobject Technologies gained after the company received an order from Andhra Pradesh Residential Educational Institutions Society (APREIS) to implement AP State Board content in its 50 Institutions.

The market breadth remained pessimistic, as there were 1399 shares on the gaining side against 1061 shares on the losing side, while 146 shares remained unchanged.

The BSE Sensex is currently trading at 28637.83, down by 23.75 points or 0.08% after trading in a range of 28599.13 and 28726.10. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.39%, while Small cap index up by 0.38%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.87%, Oil & Gas up by 0.75%, Metal up by 0.63%, Energy up by 0.53% and Basic Materials up by 0.51%, while Telecom down by 1.35%, FMCG down by 0.18%, Utilities down by 0.11%, TECK down by 0.07% and Power down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.36%, Asian Paints up by 1.17%, Axis Bank up by 0.97%, Wipro up by 0.91% and Tata Motors up by 0.88%. On the flip side, Bharti Airtel down by 1.89%, ITC down by 1.32%, Sun Pharma down by 1.01%, Coal India down by 0.84% and Mahindra & Mahindra down by 0.58% were the top losers.

Meanwhile, extending its safeguard measures for the domestic players and retaining the protectionist barriers, India has extended anti-dumping duty on some steel products from China by five years. The levy has been imposed in the range of $961.33 to $1,610.67.Earlier, the government had imposed a provisional anti-dumping duty on the import of seamless tubes, pipes and hollow profiles of iron, alloy or non-alloy steel, whether hot-finished or cold-drawn or cold-rolled of an external diameter not exceeding 355.6 mm, effective May 17 last year.

The provisional levy was imposed on the recommendation of the Directorate General of Anti-Dumping And Allied Duties (DGAD). The DGAD in its final findings had made a case for definitive anti-dumping duty on the steel products. Acting on the recommendations, the Central Board of Excise and Customs (CBEC) in the revenue department has now imposed a definitive anti-dumping duty. As per the latest announcement, the anti-dumping duty shall be effective for a period of five years from the date of the imposition of the provisional anti-dumping duty.

Steelmakers such as JSW Steel, Tata Steel, and Steel Authority of India have lobbied for more measures to protect them from cheaper imports from China, Japan and South Korea. Indian steel companies remain exposed to imports from other Asian countries. The purpose of anti-dumping duties, in general, is to eliminate injury caused to the domestic industry by the unfair trade practices of dumping.

The CNX Nifty is currently trading at 8873.70, down by 5.50 points or 0.06% after trading in a range of 8863.75 and 8897.15. There were 28 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.73%, HCL Tech up by 1.49%, BPCL up by 1.19%, Hindustan Unilever up by 1.18% and Yes Bank up by 1.17%. On the flip side, Bharti Infratel down by 3.48%, Bharti Airtel down by 1.88%, ITC down by 1.50%, Zee Entertainment Enterprises down by 1.42% and Ambuja Cement down by 1.09% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite rose 0.23%, Jakarta Composite gained 0.19%, KOSPI Index surged 0.85% and Nikkei 225 was up by 0.73%. On the flip side, Taiwan Weighted decreased 0.25%, Hang Seng slipped 0.28% and FTSE Bursa Malaysia KLCI was down by 0.26%.