Local equities extend losses in morning session

Local equity benchmarks extended their losses in morning session on weak Asian cues and rupee continued its fall to hit a fresh record low. Sensex plunged over 215 points and Nifty trading below 11,550 level. The rupee dropped to a fresh record low of against the US dollar on strong demand for the US currency from importers as the greenback strengthened against other currencies overseas on upbeat jobs data. Sentiments remained pessimistic with a report that total liabilities of the government increased to Rs 79.8 lakh crore at end-June 2018 from Rs 77.98 lakh crore at end-March 2018. Public debt accounted for 89.3% of total outstanding liabilities at end-June 2018 with internal debt accounting for 83.0% share. Nearly 24.9% of the outstanding dated securities had a residual maturity of less than five years. Traders took note of President Donald Trump’s statement that he wants to stop the subsidies that growing economies like India and China have been receiving as he wants the US, which he considers as a ‘developing nation’, to grow faster than anybody.

On the global front, Asian markets were trading mostly in red, after US President Donald Trump declared he was considering tariffs on an additional $267 billion in Chinese goods, ratcheting up tensions between the world's two biggest economies. Back home, on the sectoral front, Oil & Gas stocks were trading in red, despite Oil Minister Dharmendra Pradhan’s statement that India as a stable economy should avoid any knee-jerk reaction to volatile crude oil prices, indicating no cut in taxes on fuel despite petrol breaching the Rs 80 per litre level in the Capital.

The BSE Sensex is currently trading at 38170.70, down by 219.12 points or 0.57% after trading in a range of 38098.69 and 38354.52. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.21%, while Small cap index was down by 0.06%.

The few gaining sectoral indices on the BSE were IT up by 0.53%, Healthcare up by 0.41% and TECK was up by 0.33%, while Consumer Durables down by 1.06%, FMCG down by 1.01%, Telecom down by 0.92%, Oil & Gas down by 0.63% and Basic Materials was down by 0.55% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 3.39%, Wipro up by 0.82%, Yes Bank up by 0.79%, Infosys up by 0.73% and Adani Ports & SEZ was up by 0.38%. On the flip side, Kotak Mahindra Bank down by 2.22%, Power Grid down by 2.22%, Indusind Bank down by 2.08%, Asian Paints down by 2.01% and Vedanta was down by 1.90% were the top losers.

Meanwhile, with an objective to protect domestic players from cheap imports of the commodity from Chain, India is likely to impose anti-dumping duty of up to $185.51 per tonne for five years on certain varieties of Chinese steel.  JSW Steel, Sunflag Iron & Steel Co, Usha Martn, Gerdau Steel India, Vardhman Special Steels and Jayaswal Neco Industries had jointly filed an application for initiation of the investigations and levying of anti-dumping duties on the steel.

The Directorate General of Trade Remedies (DGTR), in its anti-dumping investigations, has said that dumped imports of 'straight length bars and rods of alloy steel' from China have increased in absolute terms during the period of probe (2016-17). It further stated that the dumped imports are undercutting the prices of the domestic industry and due to this the domestic industry's profits, return on capital employed and cash profits have declined during 2016-17.

DGTR recommended duty in the range of $44.89 per tonne and $185.51 per tonne. Though, it highlighted that no anti-dumping duty shall be payable on imports of forged bars and tool and die steel if their landed value is above $659.91 per tonne. If the landed value is lower than $659.91 per tonne, then the difference between that value and $659.91 per tonne shall be payable as anti-dumping duty. Besides, it pointed out that the imposition of anti-dumping duties might affect the price levels of the product in India. However, fair competition in the market will not be impacted by the imposition of these trade remedy measures.

Additionally, in the financial year 2016-17, imports of straight length bars and rods of alloy steel from China have increased to 1,80,959 tonnes from 56,690 tonnes in 2013-14. India's total imports rose to 2,56,004 tonnes in FY17 from 1,32,933 tonnes in FY14. The demand of this steel in India too increased to 16,69,653 tonnes in FY17 from 15,14,795 tonnes in FY14. Moreover, the trade gap with China has increased to $63.12 billion in FY18 from $51.11 billion in the previous financial year. Domestic steel manufacturers always flag concerns over the imports from the neighbouring country, with which India has a huge trade deficit.

The CNX Nifty is currently trading at 11513.65, down by 75.45 points or 0.65% after trading in a range of 11496.35 and 11573.00. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 3.04%, Lupin up by 1.53%, HCL Tech. up by 1.22%, Cipla up by 1.10% and Infosys was up by 0.76%. On the flip side, Power Grid down by 2.53%, Ultratech Cement down by 2.49%, Indusind Bank down by 2.09%, Kotak Mahindra Bank down by 2.08% and Asian Paints was down by 1.90% were the top losers.

Asian markets were trading mostly in red; Hang Seng slipped 260.92 points or 0.98% to 26,712.55, Taiwan Weighted fell 152.22 points or 1.42% to 10,694.77, Straits Times lost 15.37 points or 0.49% to 3,119.02, Shanghai Composite dropped 17.00 points or 0.63% to 2,685.30 and Jakarta Composite was down by 32.16 points or 0.55% to 5,819.31.

On the other hand, Nikkei 225 gained 41.43 points or 0.19% to 22,348.49 and KOSPI was up by 5.99 points or 0.26% to 2,287.57.