Markets pare initial losses; trade in green zone

Indian equity markets pared all their initial losses and were trading in green terrain in the early noon session on the back of buying by investors in Auto and Healthcare stocks. Strengthening of rupee against the dollar helped to push the markets higher. Traders took some support from Finance Minister Arun Jaitley’s statement that demonetisation helped in tackling black money and expanding the tax base. Sentiments also remained optimistic with a report stating that demonetisation was a fundamental corrective without which the Indian economy would have collapsed by now just like subprime crisis in the US. Meanwhile, finance ministry stated that total Goods and Services Tax (GST) refunds to the tune of Rs 82,775 crore to exporters has been cleared by the Central Board of Indirect Taxes and Customs (CBIC) and the state authorities out of the total refund claims of Rs 88,175 crore received so far. However, gains remain capped due to selling in IT, TECK and Metal stocks. Traders remained concerned with Moody’s Investors Service’s report that Indian economy’s growth will slow down to 7.3 per cent in the next year as domestic demand tapers on higher borrowing cost due to rising interest rates.

On the global front, all the Asian markets were trading under pressure after a post-election Wall Street rally faded and the U.S. Federal Reserve suggested it will keep raising interest rates. Back home, stocks related to oil and gas sector were trading in green due to fall in crude oil prices. A report showed that petrol and Diesel were slashed by Oil-marketing companies on Friday (November 9, 2018). Petrol was priced at Rs 78.06 per litre in New Delhi and Diesel was sold at Rs 72.74 per litre in New Delhi.

The BSE Sensex is currently trading at 35253.54, up by 15.86 points or 0.05% after trading in a range of 35011.23 and 35284.45. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.79%, while Small cap index up by 0.54%.

The top gaining sectoral indices on the BSE were Auto up by 1.12%, Healthcare up by 1.08%, Consumer Disc up by 1.07%, Consumer Durables up by 0.76% and Oil & Gas up by 0.72%, while IT down by 1.18%, TECK down by 1.06%, Metal down by 0.69%, Realty down by 0.28% and Telecom down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 4.15%, Yes Bank up by 3.75%, Sun Pharma up by 2.95%, Axis Bank up by 2.41% and Adani Ports up by 2.27%. On the flip side, Infosys down by 2.16%, Wipro down by 1.94%, Bharti Airtel down by 1.42%, TCS down by 1.23% and Tata Steel down by 1.11% were the top losers.

Meanwhile, the World Trade Organization’s (WTO) dispute panel has said that India’s safeguard duty move on some iron and steel products was inconsistent with certain global trade norms. The ruling comes in the backdrop of Japan dragging India to the WTO against certain measures taken by New Delhi on imports of iron and steel products. The case was filed by Japan in December 2017.

The panel in its ruling has said “having found that India acted inconsistently with certain provisions of the GATT 1994 and the Agreement in Safeguards, we recommend that, to the extent that the measure continues to have any effects, India bring it into conformity with its obligations under those agreements.” The duty imposed by India already ended in March this year. As India and Japan failed to mutually resolve the dispute over imposition of safeguard import duty on iron and steel products, the WTO had set up a panel to resolve the dispute between the two countries. The two sides failed to resolve the issue in the bilateral consultation process and Japan sought formation of dispute resolution panel. Japan, which is the second largest steel producer in the world, had alleged that duties imposed on steel imports by India violates WTO trade norms.

In September 2015, India imposed provisional safeguard duty of 20 per cent on import of certain categories of steel with a view to protect domestic producers. Later, it was reduced and extended till March this year. The dispute assumes significance as India and Japan implemented a comprehensive free trade agreement in 2011. It gave easy access to Japan in the Indian steel market

The CNX Nifty is currently trading at 10606.90, up by 8.50 points or 0.08% after trading in a range of 10544.85 and 10619.35. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were HPCL up by 4.59%, Asian Paints up by 4.08%, Yes Bank up by 3.64%, Sun Pharma up by 3.17% and BPCL up by 2.75%. On the flip side, Infosys down by 2.31%, JSW Steel down by 1.95%, Wipro down by 1.81%, Hindalco down by 1.66% and Dr. Reddys Lab down by 1.57% were the top losers.

All the Asian markets were trading in red; Hang Seng plunged 650.350 points or 2.54% to 25,577.37, Shanghai Composite declined 29.56 points or 1.13% to 2,606.07, Straits Times slipped 22.31 points or 0.73% to 3,070.93, Taiwan Weighted decreased 115.30 points or 1.17% to 9,830.01, Nikkei 225 shrinked 236.67 points or 1.06% to 22,250.25, KOSPI decreased 4.97 points or 0.24% to 2,087.66 and Jakarta Composite was down 86.69 points or 1.47% to 5,890.12.