Indian benchmarks trade flat in morning session

Indian equity benchmarks were trading flat in morning session, as investors digested the formation of a non-BJP government in Karnataka as well as news that the US and China have reached an agreement to set up a framework for addressing trade imbalances in the future. Traders remained concerned with finance ministry’s statement that rising crude oil prices could drive up India’s import bill in the range of $25-50 billion this fiscal, worsening the current account deficit. However, elevated oil prices would impact neither economic growth nor the fiscal deficit of the Centre. Down side remained capped with a report that Indian companies has put up a satisfactory show so far in the Q4FY18 earnings season with elevated commodity prices helping producers but hurting users. Most companies have reported numbers in line with expectations and while there have been no big disappointments there haven’t been any big surprises either. Investors took note of the report stating that India is the sixth wealthiest country in the world with a total wealth of $8,230 billion, while the US is the richest nation globally.

On the global front, Asian markets were trading mostly in green, after US Treasury Secretary Steven Mnuchin said that the US trade war with China is 'on hold' as the world's two largest economies work on a wider trade agreement. Back home, in scrip specific development, UltraTech Cement was trading in green as the company’s board approved the reorganisation of the cement business of Century Textiles and Industries and its absorption into UltraTech, giving itself the leadership in all regional markets in a deal that has long been in the works involving Kumar Mangalam Birla and his grandfather BK Birla. Inditrade Capital touches the roof on getting nod to acquire additional stake in JRG Fincorp.

The BSE Sensex is currently trading at 34850.51, up by 2.21 points or 0.01% after trading in a range of 34758.84 and 34973.95. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.71%, while Small cap index was down by 0.80%.

The top gaining sectoral indices on the BSE were Telecom up by 0.91%, IT up by 0.66%, TECK up by 0.58%, Capital Goods up by 0.47% and PSU was up by 0.39%, while Realty down by 1.33%, Auto down by 1.17%, Metal down by 1.01%, Healthcare down by 0.99% and Consumer Disc was down by 0.88% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.22%, ICICI Bank up by 1.94%, Bharti Airtel up by 1.67%, Larsen & Toubro up by 1.32% and ONGC was up by 1.24%. On the flip side, Sun Pharma down by 2.32%, Maruti Suzuki down by 1.67%, Hero MotoCorp down by 1.53%, Tata Motors - DVR down by 1.41% and Dr Reddys Lab was down by 1.40% were the top losers.

Meanwhile, in a tit-for-tat move, India has told the World Trade Organization (WTO) that it plans to increase duties by up to 100 percent on 20 products including almonds, apple and specific motorcycles imported from the United States (US) from the month of June 2018, if Washington does not roll back high tariffs on certain steel and aluminium items. The additional duty proposed to be hiked on these items ranges from 5 percent to 100 percent.

According to a communication by India to WTO, India hereby notifies the Council for Trade in Goods of its decision to suspend concessions or other obligations that are substantially equivalent to the amount of trade affected by the measures imposed by the US. It also said that the proposed suspension of concessions would be in the form of an increase in tariffs on selected products originating in the US. In addition, it said that that India reserves its right to further suspend substantially equivalent concessions and other obligations based on the measures of the US.

Earlier, India had urged the US to exempt it from the decision to raise import duties on certain steel and aluminium products. The country had proposed this move under the WTO’s Agreement on Safeguards. In March 2018, US President Donald Trump had imposed heavy import tariffs on steel and aluminium items, a move that had sparked fears of global trade war. US President Donald Trump had signed two proclamations that levied 25% tariff on steel and 10% tariff on aluminium imported from all countries except neighbouring Canada and Mexico.

India has also dragged the US to the WTO’s dispute settlement mechanism over the imposition of import duties on steel and aluminium. India has stated that the decision will impact exports of these products to the US and it is not in compliance with global trade norms. India's exports of steel and aluminium products to America stood at about $1.5 billion every year. India's exports to the US in 2016-17 stood at $42.21 billion, while imports were $22.3 billion.

The CNX Nifty is currently trading at 10577.60, down by 18.80 points or 0.18% after trading in a range of 10567.10 and 10621.70. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 2.02%, TCS up by 1.97%, ICICI Bank up by 1.90%, Larsen & Toubro up by 1.32% and Bharti Infratel was up by 1.23%. On the flip side, Hindalco down by 2.63%, Sun Pharma down by 2.34%, UPL down by 2.11%, Indiabulls Housing Finance down by 1.82% and Bajaj Finance was down by 1.80% were the top losers.

Asian markets were trading mostly in green, KOSPI Index surged 7.64 points or 0.31% to 2,468.29, FTSE Bursa Malaysia KLCI gained 7.72 points or 0.42% to 1,862.22, Shanghai Composite soared 24.63 points or 0.77% to 3,217.93, Nikkei 225 strengthened 87.16 points or 0.38% to 23,017.52, Taiwan Weighted advanced 142.14 points or 1.31% to 10,972.98 and Hang Seng was up by 391.97 points or 1.26% to 31,439.88. On the other side, Jakarta Composite was down by 38.63 points or 0.67% to 5,744.68.