Bourses continue to trade higher on easing WPI inflation

Key benchmark indices continued to trade higher in early afternoon session, on the back of easing wholesale price index (WPI) inflation data. WPI for the month of January was recorded 2.84% easing further on lower food prices as compared to 3.58% in the previous month. The WPI food inflation fell to 1.65% from previous month’s 2.91%. Additional support also came with CRISIL’s latest report stating that the Reserve Bank's revised framework for quicker and time-bound resolution of stressed assets is a long-term positive for banks. The report further noted that the new framework has the potential to bring about a big change in the approach of banks to monitor their exposures and resolution of non-performing assets (NPAs). Moreover, a stronger rupee against the dollar coupled with firmness in Asian stocks also influenced market sentiment. In scrip specific development, Larsen & Toubro (L&T) was up by over half a percent with its construction arm -- L&T Construction – bagging orders worth Rs 1,585 crore across various business segments.

On the global front, Asian markets were trading in green, after Wall Street shrugged off higher-than-forecast US inflation figures, while Treasury yields hit a fresh four-year high. Back home, the BSE Sensex is currently trading at 34386.28, up by 230.33 points or 0.67% after trading in a range of 34194.67 and 34425.65. There were 25 stocks advancing against 5 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.26%, while Small cap index was down by 0.05%.

The top gaining sectoral indices on the BSE were Metal up by 1.55%, IT up by 0.91%, Basic Materials up by 0.90%, Bankex up by 0.81% and TECK up by 0.72%, while Consumer Durables down by 0.30%, Healthcare down by 0.07% and Consumer Disc down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.79%, Infosys up by 2.18%, Yes Bank up by 1.75%, Adani Ports & SEZ up by 1.36% and HDFC up by 1.30%. On the flip side, Hero MotoCorp down by 1.28%, Asian Paints down by 0.66%, Wipro down by 0.14%, Kotak Mahindra Bank down by 0.12% and HDFC Bank down by 0.07% were the top losers.

Meanwhile, keeping in mind interest of local manufacturers, India has started investigation to review the need for continued imposition of existing anti-dumping duty on import of flat base steel wheels from China. The commerce ministry’s investigating arm – Directorate General of Anti-dumping and Allied Duties (DGAD) would also examine whether the expiry of existing duty is likely to lead to continuation or recurrence of dumping and injure the domestic industry. 

DGAD has considered the period of October 2016 to September 2017 as the period of investigation and would also consider the data of 2014-17 for the investigation. The finance minister had in 2013 imposed duty up to $613 per tonne on import of the product from China for five years. Kalyani Maxion Wheels and Wheels India have filed an application seeking review and continuation of the existing anti-dumping duty on import of the wheels. Besides, India has imposed anti-dumping duty on as many as 98 products imported from China, as on December 27 last year. Some of the products in the list include flax fabrics, vitamin C, certain fibres and chemicals. Trade deficit with China is always a concern for India and it stood at $36.73 billion during April-October this fiscal.

Countries carry out anti-dumping investigation to determine whether their domestic industries have been hurt because of a surge in below-cost imports. As a counter measure, they impose duties under the multilateral WTO regime. The duty aims to ensure fair trading practices and creating a level-playing field for domestic producers with regard to foreign producers and exporters. They are not a measure to restrict imports or cause an unjustified increase in cost of products.

The CNX Nifty is currently trading at 10569.10, up by 68.20 points or 0.65% after trading in a range of 10518.65 and 10588.75. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.51%, Vedanta up by 3.25%, ICICI Bank up by 2.57%, Infosys up by 2.25% and Bharti Infratel up by 1.94%. On the flip side, Indiabulls Housing Finance down by 1.79%, Zee Entertainment down by 1.72%, Hero MotoCorp down by 1.28%, Aurobindo Pharma down by 1.07% and Lupin down by 0.91% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 3.35 points or 0.18% to 1,838.28, Jakarta Composite was up by 4.36 points or 0.07% to 6,598.76 and Nikkei 225 added 310.81 points or 1.47% to 21,464.98.