Indian equities remain in red terrain

Indian equity benchmarks continued their trade in red territory in early afternoon session, as selling continued in Consumer Durables, Capital Goods and Basic Materials stocks. The sentiments remained sluggish with chief statistician TCA Anant’s statement that lower-than-expected inflation is estimated to pull down nominal GDP growth to 9.5% in FY18, against the budgeted 11-11.5%. He further added that this will impact the final projection of the FY18 fiscal deficit (expressed as a percentage of nominal GDP). Some caution also prevailed in the markets ahead of key economic data for November IIP and December CPI. However, the further losses got restricted with the World Bank projecting India’s growth rate to 7.3 per cent in 2018 and 7.5 for the next two years. It said that with an ambitious government undertaking comprehensive reforms, India has enormous growth potential compared to other emerging economies. In scrip specific development, Steel Strips Wheels (SSWL) was up by over two and half percent after bagging a maiden exports order from high potential US Truck & Trailer Aftermarket for its Truck Steel wheels plant in Chennai.

On the global front, Asian markets were trading mostly in red, despite Wall Street's extended winning streak. Back home, the BSE Sensex is currently trading at 34361.57, down by 81.62 points or 0.24% after trading in a range of 34311.63 and 34565.63. There were 7 stocks advancing against 23 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading in red; the BSE Mid cap index was down by 0.51%, while Small cap index was down by 0.45%.

The top gaining sectoral indices on the BSE were Realty up by 0.48%, Telecom up by 0.43%, Oil & Gas up by 0.17%, FMCG up by 0.14% and Energy up by 0.10%, while Consumer Durables down by 1.03%, Capital Goods down by 0.59%, Basic Materials down by 0.55%, Auto down by 0.53% and Industrials down by 0.46% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.35%, Adani Ports & SEZ up by 1.28%, Wipro up by 0.99%, ONGC up by 0.41% and ITC up by 0.37%. On the flip side, Asian Paints down by 1.54%, Tata Motors - DVR down by 1.38%, Yes Bank down by 1.26%, Dr. Reddy’s Lab down by 1.07% and Tata Steel down by 0.99% were the top losers.

Meanwhile, in order to protect the domestic industry from serious injury, India’s Directorate General of Safeguards (DGS) has recommended a 70 percent safeguard duty on import of solar power equipment from China and Malaysia for a period of 200 days. In a January 5 recommendation to the finance ministry, the DGS said that solar cells are being imported into India in such increased quantities and under such conditions so as to cause or threaten to cause serious injury to the domestic industry manufacturing like or directly competitive products.

The safeguard duty would be levied if the finance ministry accepts the recommendations of the DGS. Acting on an application filed by an association of five domestic solar cell and module manufacturers, including the Adani Group, DGS recommended a provisional safeguard duty be imposed at the rate of 70 percent ad valorem on the imports of solar cells whether or not assembled in modules or panels. Before final duties or import taxes are levied, DGS will hold further investigation into the injury caused by cheap imports. It would also hold a public hearing on the issue. Besides, the DGS has stated that the existing critical circumstances justify the immediate imposition of a provisional Safeguard Duty to save local units from further serious injury, which would be difficult to repair in case the safeguard measure is delayed.

DGS highlighted that India’s annual manufacturing capacity for solar cells stands at around 3GW as compared with the average requirement of 20GW. It also indicated that the import of solar equipment jumped from 1,271MW in 2014-15 to 4,186MW in the next year and to 6,375 MW in 2016-17. It mentioned that current fiscal imports are pegged at 9,474 MW as compared to a domestic production of 1,164 MW. Adding further, it said that the growth rate of such imports as a percentage of the domestic production was a remarkable 1,371 per cent during the intervening year 2015-16. It also stated that even the overall growth rate of the imports relative to its domestic production is very significant, rising from 519 per cent in 2014-15 to 814 per cent in 2017-18.

The CNX Nifty is currently trading at 10606.20, down by 30.80 points or 0.29% after trading in a range of 10592.70 and 10655.50. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were HPCL up by 1.85%, Coal India up by 1.43%, Tech Mahindra up by 1.26%, Wipro up by 1.20% and Adani Ports & SEZ up by 0.89%. On the flip side, Indiabulls Housing Finance down by 1.68%, Asian Paints down by 1.45%, Eicher Motors down by 1.41%, Yes Bank down by 1.38% and UPL down by 1.15% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted decreased 83.8 points or 0.77% to 10,831.09, Nikkei 225 was down by 61.79 points or 0.26% to 23,788.20, KOSPI Index dipped 10.48 points or 0.42% to 2,499.75 and FTSE Bursa Malaysia KLCI shed 2.12 points or 0.12% to 1,824.83.

On the flip side, Shanghai Composite increased 1.76 points or 0.05% to 3,415.66, Jakarta Composite was up by 13.81 points or 0.22% to 6,386.96 and Hang Seng added 124.23 points or 0.4% to 31,135.64.