Benchmarks trade flat in morning session

Indian equity benchmarks erased early gains and are now hovering near neutral lines in the morning session as investors await the outcome of two-day Fed policy review later in the day. The rupee opened higher against dollar on account of selling of American currency by banks and exporters. Foreign Portfolio Investors stood net sellers in domestic equity markets and sold shares worth Rs 83.16 crore with gross purchases and gross sales of Rs 3385.13 crore and Rs 3468.29 crore, respectively. The street took note of SBI Research report stating that economy has been on a downslide since September 2016 and the slowdown is real and not technical, calling for more public spending to arrest the slide. The report advocated upping of spends by the government as a solution to the problem at hand. Meanwhile, investors also took note that the government may soon unveil a package of measures to speed up growth, generate employment, lift exports and step up investment in infrastructure. A broad framework to boost the economy was discussed a meeting of ministers and officials chaired by finance minister Arun Jaitley late Tuesday evening as the government grappled with a slump in growth. There have been concerns over growth slumping to a three-year low of 5.7% in the April-June quarter with disruption due to the rollout of GST and the lingering impact of demonetization being the primary cause.

Select steel stocks were buzzing after ICRA in its report highlighted that domestic steel firms will see improved profitability in near term. A 14% increase in domestic steel prices since June 2017, led by a sharp recovery in international steel prices and growth in domestic demand in the April-August period has brought much-needed cheer in the steel sector. Buoyant international steel prices have also led to a 57% year-on-year growth in exports during April-August 2017, helping the domestic steel industry operate at a capacity utilization of above 80% in the current financial year. Telecom stocks were showing mixed trend as the Telecom Regulatory Authority of India (TRAI) has more than halved the interconnect usage charge (IUC) from October 1 and said the fee will be scrapped from 2020, in a move that it said would benefit consumers. IUC has been reduced to 6 paise a minute from 14 paise a minute and to zero starting January 1, 2020, based on the view that costs incurred by operators will drop. The decision saw TRAI coming down on the side of new entrant Reliance Jio Infocomm, while rejecting the arguments made by older telcos Bharti Airtel, Vodafone India and Idea Cellular.

Traders were seen piling up position in Capital Goods, Industrials and Energy stocks, while selling was witnessed in Metal, Auto and TECK sector stocks. Select tyre stocks were buzzing as government has imposed anti-dumping duty on import of certain type of radial tyres used in buses and trucks to protect domestic manufacturers from below cost shipments from China for five years. The levy follows DGAD recommendation after Apollo Tyres, JK Tyre Industries and Ceat had approached it for investigations in dumping of tyres. In scrip specific development, Bodhtree Consulting was locked at upper circuit limit after it bagged its second contract from the Medical Council of India. The current award is valued at over Rs 100+ crore inclusive of taxes and is part of Digital Mission Mode Project II, under which 550 medical colleges in the country are covered.

On the global front, Asian markets were trading mostly in green, as Wall Street again rose to record highs. Booming shipments of cars and electronics in August drove up Japan’s exports at the fastest pace in nearly four years, further evidence that overseas demand is strong enough to support healthy economic growth. The 18.1% annual increase in exports was the fastest since November 2013. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 32,500 and 10,150 levels respectively. The market breadth on BSE was positive in the ratio of 1138:989, while 114 scrips remained unchanged.

The BSE Sensex is currently trading at 32406.44, up by 4.07 points or 0.01% after trading in a range of 32400.11 and 32499.88. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.11%, while Small cap index was up by 0.16%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.00%, Industrials up by 0.35%, Energy up by 0.20%, Consumer Durables up by 0.17% and Utilities up by 0.16%, while Metal down by 0.52%, Auto down by 0.40%, TECK down by 0.40%, IT down by 0.37% and Telecom down by 0.34% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 1.74%, Larsen & Toubro up by 1.35%, Reliance Industries up by 1.20%, SBI up by 1.03% and ITC up by 0.73%.

On the flip side, Tata Motors down by 1.79%, Hero MotoCorp down by 1.69%, Sun Pharma down by 1.61%, Coal India down by 1.39% and Cipla down by 1.15% were the top losers.

Meanwhile, the Finance Ministry has imposed definitive anti-dumping duty on new Chinese radial tyres used in buses and lorries/trucks. The duty has been slapped on “new/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having nominal rim dia code above 16 (inch)” used in buses and lorries/trucks.

Based on the recommendations of the Designated Authority in the Commerce Ministry, the Directorate General of Anti-dumping and Allied Duties (DGAD) has imposed definitive anti-dumping duty that ranged from $245.35 per tonne to $452.33 per tonne, depending on the producer and exporter from China. This anti-dumping duty, unless revoked earlier, will be valid for a period of five years.

In its recommendation, the DGAD said the domestic industry has suffered material injury on account of the imports from China. It found that the tyres have been exported to India from the subject country at “below normal value”.

Earlier, Automotive Tyre Manufacturers' (ATMA) had filed the petition on behalf of domestic tyre majors, Apollo Tyres, J.K.Tyre Industries and Ceat, who had approached DGAD for investigations in dumping of tyres.

The CNX Nifty is currently trading at 10141.25, down by 6.30 points or 0.06% after trading in a range of 10139.85 and 10171.05. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 1.56%, Dr. Reddy’s Lab up by 1.50%, Larsen & Toubro up by 1.48%, SBI up by 1.05% and Tata Steel up by 0.76%.

On the flip side, BPCL down by 2.37%, Tata Motors down by 1.88%, Hindalco down by 1.60%, Sun Pharma down by 1.56% and Hero MotoCorp down by 1.50% were the top losers.

The Asian markets were trading mostly in green; Nikkei 225 increased 0.34 points to 20,299.72, Jakarta Composite increased 0.99 points or 0.02% to 5,902.32, Shanghai Composite increased 7.98 points or 0.24% to 3,364.82 and Hang Seng increased 72.28 points or 0.26% to 28,123.69.

On the other hand, Taiwan Weighted decreased 62.65 points or 0.59% to 10,513.49, KOSPI Index decreased 3.7 points or 0.15% to 2,412.35 and FTSE Bursa Malaysia KLCI decreased 3.4 points or 0.19% to 1,773.26.