Indian bourses continue to trade in negative terrain

Indian bourses continued to trade in negative territory in afternoon session, tracking weak cues from the global markets amid selling by domestic institutional investors and depreciating rupee. Sentiments remained weak with CARE Ratings in its report stating that India has of late seen a slight revival in the investment cycle, but that is primarily driven by the increased government spending, and not so much by the private sector. There are also concerns such as a sharp rise in number of investment projects dropped midway. However, losses were limited with Commerce and Industry Minister Suresh Prabhu’s statement that the country’s goods export will touch $330 billion in 2018-19, which will be the highest ever. He said the country's merchandise exports have seen high growth in the past six years through sector-specific interventions, focused export promotion initiatives, and quick resolution of issues. On the sectoral front, auto stocks were trading lower, impacted with data released by the Society of Indian Automobile Manufacturers (SIAM) that domestic passenger vehicle (PV) sales declined 1.11 percent to 2,72, 284 units in February from 2,75,346 units in the same month previous year.

On the global front, Asian markets were trading in red, as the European Central Bank's decision to slash its growth and inflation forecasts added to increasing pessimism about the global outlook. Back home, the BSE Sensex is currently trading at 36680.25, down by 45.17 points or 0.12% after trading in a range of 36610.47 and 36753.59. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were mixed; the BSE Mid cap index fell 0.13%, while Small cap index was up by 0.05%.

The top gaining sectoral indices on the BSE were Utilities up by 0.44%, Consumer Durables up by 0.33%, Healthcare up by 0.25%, Telecom up by 0.23% and Power up by 0.18%, while Metal down by 1.49%, Oil & Gas down by 0.76%, Basic Materials down by 0.59%, Energy down by 0.57% and PSU down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.43%, Sun Pharma up by 1.35%, Bajaj Auto up by 1.24%, TCS up by 0.88% and Yes Bank up by 0.84%. On the flip side, Tata Motors - DVR down by 2.85%, Tata Motors down by 2.75%, HCL Tech. down by 1.66%, Tata Steel down by 1.64% and ONGC down by 1.58% were the top losers.

Meanwhile, with an aim to boost the textile sector and make it globally competitive, the Union Cabinet has approved a scheme for rebate of all state and central embedded levies for apparel and made-up textile segments, which would make shipments zero-rated. Textiles Secretary Raghvendra Singh has said that the decision was needed as incentives for apparel and made-ups under the Merchandise Exports from India Scheme (MEIS) were not WTO compatible anymore.

Singh has stated that rates under the Remission of State Levies (RoSL) have been revised upwards for garments and made-ups, and centrally embedded levies outside the ambit of GST have been added to the scheme, which will more than offset incentives not available under MEIS for apparel and made-ups. He noted that the decision assumes importance as shipments from neighbouring countries such as Sri Lanka, Bangladesh and Vietnam enjoy zero duty access to the EU, which is the biggest export market for India's apparel sector. However, he said “our exports to the European Union have to face a tariff disparity of around 9.6 per cent. We were facing acute competition in this business where profitability is quite marginal.”

Textiles Secretary further said “our endeavour will also be to extend these benefits to exports of fibre, yarn and fabrics. A committee will be set up to examine if similar incentives can be extended to these segments.” According to him, this RoSL for apparel and made-ups will amount to Rs 6,300 crore revenue foregone per annum. He also stated that the inter-ministerial committee as well as the norms committee of the Department of Commerce shall from time to time assess the impact of this decision and tweak it wherever needed. 

The CNX Nifty is currently trading at 11033.85, down by 24.35 points or 0.22% after trading in a range of 11009.60 and 11049.00. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were NTPC up by 2.77%, Eicher Motors up by 1.73%, Sun Pharma up by 1.34%, Titan Co up by 1.27% and Bajaj Auto up by 1.08%. On the flip side, Wipro down by 3.78%, Tata Motors down by 3.04%, Indian Oil Corp. down by 2.90%, Hindalco down by 2.67% and Tata Steel down by 1.72% were the top losers.

Asian markets were trading in red; Hang Seng decreased 486.84 points or 1.69% to 28,292.61, Nikkei 225 slipped 430.45 points or 2.01% to 21,025.56, Taiwan Weighted dropped 69.93 points or 0.68% to 10,241.75, KOSPI fell 28.35 points or 1.31% to 2,137.44, Straits Times trembled 29.24 points or 0.91% to 3,200.24, Shanghai Composite declined 119.91 points or 3.86% to 2,986.51 and Jakarta Composite was down by 55.07 points or 0.85% to 6,402.89.