Indian bourses continue to trade flat in afternoon deals

Indian bourses continued to trade flat in afternoon session, with frontline gauges trading below their crucial 36,700 (Sensex) and 11,050 (Nifty) levels, amid subdued Asian cues. Traders remain concerned with private report that the likelihood of Indian GDP growth coming at below 7 percent in 2019-20 is ‘very high’ despite aiding factors like low oil prices and an expansionary budget. It also said that global slowdown, tight financial conditions and political uncertainty in the election year will be the biggest headwinds for growth. However, rupee’s rise against the US dollar gave some comfort to investors. Traders also took note of a report that India is exploring various options, including approaching the WTO dispute body, to deal with the US decision to withdraw import incentives for about 2,000 domestic goods under the trade preference scheme.

On the global front, Asian markets were trading mostly in red, as investors turn their attention to further signs of weakness in the global economy. A worldwide growth forecast downgrade from the Organisation for Economic Cooperation and Development (OECD) and weaker-than-expected private US jobs data helped send Wall Street lower and dragged on Asian sentiment.

The BSE Sensex is currently trading at 36664.71, up by 28.61 points or 0.08% after trading in a range of 36640.91 and 36749.30. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.11%, while Small cap index was up by 0.19%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.45%, Industrials up by 0.98%, Telecom up by 0.71%, FMCG up by 0.39% and Utilities up by 0.39%, while IT down by 0.46%, TECK down by 0.39%, Consumer Durables down by 0.21%, Oil & Gas down by 0.14% and Healthcare down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 2.81%, Larsen & Toubro up by 2.41%, Mahindra & Mahindra up by 1.96%, Tata Motors up by 1.70% and Power Grid up by 1.22%. On the flip side, Yes Bank down by 1.81%, Vedanta down by 1.49%, Coal India down by 1.36%, Infosys down by 1.26% and NTPC down by 0.81% were the top losers.

Meanwhile, the Process Plant and Machinery Association of India (PPMAI) has expressed concern on surge in metal and capital goods imports from countries such as Korea, Indonesia, Malaysia and Japan with whom India has pacts to promote free trade. It said that the Free Trade Agreements (FTAs) along with lack of reciprocity is adversely hurting the steel manufacturers as well as the capital goods industry. It added that FTAs are meant to increase bilateral trade.

However, PPMAI has said that India's FTAs with ASEAN countries and Japan have only resulted in increasing imports of metals and capital goods with either stable or declining exports leading to the rising trade deficit. It pointed out that despite several steps taken by the government including imposing anti-dumping duties, countervailing duties, quality control and anti-circumvention measures the problem of surge in imports especially stainless steel, finished capital goods and other metals persists.

It further said that the excess capacity in China and FTA countries such as Japan, Indonesia and Korea and their ambition to sell at lower than domestic price levels due to zero duty advantage in Indian market is posing a stiff challenge to the domestic metal manufacturers and capital goods industry. It suggested that FTA should be a level playing agreement and not a one way street as it is currently prevailing. It added that currently, all FTA countries are taking full advantage by exporting metals as well as finished capital goods into India but they are not importing metals and capital goods.

The CNX Nifty is currently trading at 11043.65, down by 9.35 points or 0.08% after trading in a range of 11038.35 and 11077.95. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 2.41%, Mahindra & Mahindra up by 1.97%, HPCL up by 1.74%, Bharti Infratel up by 1.42% and Tata Motors up by 1.40%. On the flip side, Yes Bank down by 2.23%, Indiabulls Housing Finance down by 2.21%, Wipro down by 1.93%, Indian Oil Corporation down by 1.90% and Vedanta down by 1.68% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 190.27 points or 0.66% to 28,847.33, Nikkei 225 slipped 140.80 points or 0.65% to 21,456.01, Taiwan Weighted dropped 45.47 points or 0.44% to 10,311.68 and KOSPI fell 9.81 points or 0.45% to 2,165.79.

On the flip side, Straits Times advanced 0.86 points or 0.03% to 3,223.70 and Shanghai Composite gained 14.42 points or 0.46% to 3,116.52.