Bourses continue to move in green territory

Key benchmark indices continued to move in green territory in afternoon session, led by strong buying in Banking, Metal and Telecom counters amid firm Asian cues.  Sentiment remained positive with the Confederation of Indian Industry’s (CII) statement that with the US imposing an additional 25% duty on imports worth $34 billion from China, certain Indian products may become more competitive. Some optimism also came with a report that the Goods and Services Tax (GST) Council headed by Finance Minister Piyush Goyal approved setting up of a group of ministers (GoM) to tackle taxation related issues faced by micro, small and medium enterprises (MSMEs). However, gains remained capped as anxiety remained among the local traders with Care Ratings in its latest report stating that the monsoon deficit is likely to lead to lower production. It noted that the country is still facing a rainfall deficit of 7%, on a cumulative basis and the overall sown area is 7.5% less than last year. On the sectoral front, Auto sector remained in focus with report indicating that auto makers in India are set to spend up to Rs 58,000 crore in capital expenditure over the next two years-the highest in a decade-underscoring healthy demand prospects in the local market and impending safety and emission norms.

On the global front, most of the Asian counters were trading in green, after a healthy lead from Wall Street as positive US jobs data trumped fresh trade war threats. Back home, the BSE Sensex is currently trading at 37730.35, up by 174.19 points or 0.46% after trading in a range of 37643.29 and 37805.25. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.44%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Bankex up by 1.21%, Metal up by 1.14%, Telecom up by 1.06%, Energy up by 0.80% and PSU up by 0.68%, while FMCG down by 0.16%, IT down by 0.15%, Healthcare down by 0.13% were the few losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 3.84%, ICICI Bank up by 3.35%, SBI up by 2.49%, Bharti Airtel up by 2.10% and Coal India up by 1.96%. On the flip side, Hindustan Unilever down by 2.39%, Kotak Mahindra Bank down by 1.42%, Sun Pharma down by 0.99%, Asian Paints down by 0.59% and Indusind Bank down by 0.59% were the top losers.

Meanwhile, in order to boost domestic manufacturing and create better employment opportunities, the government is likely to hike import duty on around 300 textile products to 20 percent from the current level of 5-10 percent. The products which are expected to see an increase in import duties includes some fabrics, garments and man-made fibres.  Foreign direct investment (FDI) norms for the sector may also be relaxed.

The Finance Ministry may soon issue a notification in this regard. If the government decides to notify the duty hikes, then it would have to be first tabled in Parliament. Increase in duties would give an edge to domestic manufacturers as the imported products are relatively cheaper. Increase in manufacturing activity will help create jobs in the sector, which employs about 105 million people.

Recently, the Central Board of indirect Taxes and Custom (CBIC) had doubled import duty on over 50 textile products to 20 percent to promot domestic manufacturing. It had also raised the ad-valorem rate of duty for certain items. The imported products which have become expensive include woven fabrics, dresses, trousers, suits and baby garments.

The CNX Nifty is currently trading at 11396.15, up by 35.35 points or 0.31% after trading in a range of 11377.95 and 11427.65. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 3.65%, ICICI Bank up by 3.34%, SBI up by 2.41%, UPL up by 2.24% and Bharti Airtel up by 2.20%. On the flip side, Hindustan Unilever down by 2.61%, Kotak Mahindra Bank down by 1.57%, Titan Co down by 1.45%, GAIL India down by 1.29% and Dr. Reddys Lab down by 1.19% were the top losers.

Most of the Asian counters were trading in green; Straits Times increased 28.45 points or 0.86% to 3,294.18, Jakarta Composite increased 75.27 points or 1.24% to 6,082.81, Hang Seng increased 104.66 points or 0.38% to 27,780.98 and Taiwan Weighted increased 11.67 points or 0.11% to 11,024.10.

On the flip side, Shanghai Composite decreased 33.85 points or 1.25% to 2,706.59, KOSPI decreased 1.18 points or 0.05% to 2,286.50 and Nikkei 225 decreased 17.86 points or 0.08% to 22,507.32.