Bourses continue to trade sluggish in early noon session

Indian equity benchmarks continued to show a sluggish trend in early afternoon session, as caution set in ahead of the key economic data -- October IIP and November CPI, which are scheduled to be released later in the day. Sentiments remained weak with the report that India’s retail inflation likely breached the central bank’s 4.0 percent medium-term target in November after unseasonably heavy rains sent food prices soaring. The markets overlooked the UN report stating that the growth rate of India's economy is projected to accelerate from this year's 6.7 percent to 7.2 percent next year and 7.4 percent in 2019 making it again the world's fastest-growing major economy, overcoming the slowdown from demonetization. Moreover, broadly negative Asian markets along with rising crude oil prices and depreciation in Indian rupee, too kept the key indices lower. In scrip specific development, Dr. Reddy’s Laboratories was up by over three and half percent after receiving the EIR from the USFDA for its Formulations Manufacturing Plant - 3 at Bachupally, Hyderabad as closure of audit.

On the global front, Asian markets were trading mostly in red, as investors awaited the Federal Reserve meeting on Wednesday and the outcome of a major Chinese planning conference. Back home, the BSE Sensex is currently trading at 33317.45, down by 138.34 points or 0.41% after trading in a range of 33302.49 and 33458.41. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.39%, while Small cap index was up by 0.01%.

The top gaining sectoral indices on the BSE were Metal up by 0.67%, Healthcare up by 0.30%, Consumer Durables up by 0.30%, Basic Materials up by 0.17% and Industrials up by 0.01%, while Telecom down by 1.53%, Power down by 0.92%, Bankex down by 0.80%, FMCG down by 0.79% and Realty down by 0.73% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 3.84%, Adani Ports & SEZ up by 2.07%, ONGC up by 1.48%, Lupin up by 1.29% and Reliance Industries up by 0.61%. On the flip side, ITC down by 1.68%, Bharti Airtel down by 1.41%, Asian Paints down by 1.37%, ICICI Bank down by 1.33% and TCS down by 1.31% were the top losers.

Meanwhile, textile industry body the Confederation of Indian Textile Industry (CITI) has stressed that there is an urgent need to impose safeguard measures such as Rules of Origin, Yarn Forward and Fabric Forward Rules in order to prevent routing of cheaper fabrics produced in countries like China through Bangladesh and Sri Lanka, that have free trade pacts (FTAs) with India. It also observed that the country’s garment industry will face stiff competition from imported garments, especially from Bangladesh where production cost is much lower.

CITI pointed out that according to the latest data released by Bangladesh Export Promotion Bureau, India's import of garments from Bangladesh has touched $87.4 million during July to November 2017, registering a sharp increase of 56 percent from $55.92 million during the same period last year. Besides, it indicated that during July to November 2017, India's imports of knitted apparel from Bangladesh grew by 69 percent, while the imports of woven apparel jumped by 51 percent in the corresponding period of the previous financial year.

The textile industry body further said that the basic custom duty on import of garments from Bangladesh is exempted. It also noted that garment manufacturers in India have to pay duty on imported fabrics, while Bangladesh can import fabric from China duty free and convert them into garments and sell to India duty free. It added that this is putting Indian garment industry at a major disadvantage and it is feared that this figure will go up further in the coming days as more Indian Brands shift sourcing from India to low cost duty free countries like Bangladesh and Sri Lanka.

The CNX Nifty is currently trading at 10271.40, down by 50.85 points or 0.49% after trading in a range of 10264.40 and 10326.10. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 3.82%, GAIL India up by 2.31%, Vedanta up by 2.09%, Adani Ports & SEZ up by 1.99% and ONGC up by 1.54%. On the flip side, HPCL down by 3.11%, Bharti Infratel down by 2.30%, Indian Oil Corporation down by 2.23%, BPCL down by 2.20% and ITC down by 2.01% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 105.58 points or 0.36% to 28,859.71, Nikkei 225 dipped 72.56 points or 0.32% to 22,866.17, Shanghai Composite shed 33.62 points or 1.01% to 3,288.57, Taiwan Weighted fell 29.81 points or 0.28% to 10,443.28, KOSPI Index dropped 10.49 points or 0.42% to 2,461.00 and Jakarta Composite was down by 4.86 points or 0.08% to 6,021.78.

On the flip side, FTSE Bursa Malaysia KLCI was up by 1.67 points or 0.1% to 1,721.14.