Benchmarks trade slightly in red in early deals

Indian equity benchmarks are trading slightly in red in early deals on Monday with traders reacting negatively on report that India’s October-December current account deficit sharply widened from a year earlier on higher imports. The October-December current account deficit widened to 2.0 percent of gross domestic product, or $13.5 billion, compared with 1.4 percent, or $8.0 billion, in the same period a year ago. Traders also remained on sidelines ahead of an informal World Trade Organization (WTO) ministerial meeting to be held in New Delhi on 19-20 March, where Representatives from 50 countries will be participating. The 50 nations will engage in free and frank discussions on global trade to explore the options for resolving various issues and re-invigorating the WTO. However, losses remained capped with report that overseas investors have pumped in nearly Rs 6,400 crore in the segment in March so far on expectations of rebound in corporate earnings and easing of global oil prices.

On the global front, Asian markets are trading mostly in green at this point of time, but gains remained capped as traders remained on sidelines ahead of the Federal Reserve’s two-day policy meeting later in the week, where the central bank is expected to raise interest rates. The US markets closed higher on Friday as investors reacted positively to reports showing an unexpected improvement in consumer sentiment and a bigger than expected jump in industrial production.

Back home, Assocham in its report said that India should engage bilaterally with its key trading partners to promote exports if the world witnesses an escalation of trade war. Further, automotive component supplier Sandhar Technologies will open its initial public offering for subscription on March 19. In scrip specific developments, NBCC surged on bagging total business worth Rs 242 crore in February, while DB Realty gained on arm entering into DMA with Kingmaker Developers.

The BSE Sensex is currently trading at 33157.10, down by 18.90 points or 0.06% after trading in a range of 33100.76 and 33275.79. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.56%, while Small cap index was down by 0.32%.

The few gaining sectoral indices on the BSE were Capital Goods up by 0.96%, Consumer Durables up by 0.65% and Industrials was up by 0.17%, while Oil & Gas down by 1.37%, PSU down by 1.12%, Metal down by 1.07%, Energy down by 0.81% and Basic Materials was down by 0.67% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.80%, Hindustan Unilever up by 1.25%, Maruti Suzuki up by 0.77%, Dr. Reddys Lab up by 0.45% and Power Grid Corporation up by 0.39%. On the flip side, Coal India down by 2.42%, Asian Paints down by 1.57%, Bajaj Auto down by 1.51%, Hero MotoCorp down by 1.32% and Adani Ports down by 1.13% were the top losers.

Meanwhile, in the wake of US administration slapping import tariffs of 25% on steel and 10% on aluminium, unfolding the prospect of an all-out global trade war, the industry chamber Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its latest report has stated that an annual trade deficit of as much as $150 billion with the US alone will not provide India much space to retaliate at the time of global trade war as most of the Indian imports are essential in nature. It also said that the country should engage bilaterally with its key trading partners to promote exports.

ASSOCHAM also said that the country cannot flex too much of their importing muscle, even if their exports face consequences of trade war and are subjected to tariff barriers. It added that ‘the best course would be to keep engaged with the major trading partners, without aligning ourselves too much into a single bloc’. It suggested that in cases where exports are affected, India must engage bilaterally and use the channel of the World Trade Organisation (WTO).

The industry chamber further said that India may end up the current fiscal with a hefty import bill of $450 billion against exports of about $300 billion, almost one-fourth of this would be only on account of crude and other related items. Then, there are essential imports of plastics and fertiliser for which the country does not have an immediate domestic capacity. However, it noted that even before the outbreak of the recent trade war, the country in February, has seen a huge jump of 21% in annual steel imports at $1.15 billion, and of non-ferrous metals by 33% at $1 billion.

The CNX Nifty is currently trading at 10181.45, down by 13.70 points or 0.13% after trading in a range of 10169.15 and 10224.55. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 1.63%, Hindustan Unilever up by 1.17%, Maruti Suzuki up by 0.98%, Bosch up by 0.36% and Power Grid Corporation up by 0.36%. On the flip side, BPCL down by 3.92%, Indian Oil Corporation down by 3.82%, HPCL down by 2.48%, Coal India down by 2.25% and Indiabulls Housing down by 1.59% were the top losers.

Asian markets are trading mostly in green; Jakarta Composite rose 0.01 points to 6,304.96, FTSE Bursa Malaysia KLCI gained 2.11 points or 0.11% to 1,848.50, Shanghai Composite jumped 5.49 points or 0.17% to 3,275.37, Taiwan Weighted added 6.47 points or 0.06% to 11,034.17 and Hang Seng up by 60.17 points or 0.19% to 31,562.14.

On the flip side, Nikkei 225 decreased 188.4 points or 0.87% to 21,488.11 and KOSPI Index down by 14.04 points or 0.56% to 2,479.93.