Markets reverse losses to end marginally higher

Indian equity benchmarks reversed their entire losses to end marginally higher on Monday’s trading session. The start of the day was negative, amid report that the US and Indian trade negotiators ended talks on Friday without making major progress on a range of disputes over tariffs and other protectionist measures imposed by both sides that are straining bilateral ties. As per the report, Friday's talks were more about understanding each other's positions in various disputes. Market participants also remained cautious, amid reports that presence of multiple regulators with disparate priorities is hindering the growth of the all important corporate bond market in India.

Key indices traded lackluster throughout the day, tracking weak global markets. Domestic sentiments were sluggish during trading session, as private brokerage firm massively cut its GDP forecast for India to a low 4.9 percent for the year from 5.7 percent earlier, saying the economy is going through a deeper trough and even a sub-par recovery is at least a year away. However, in the last leg of the trade, key indices staged recovery, taking support from report that India Inc believes that Indian economy possesses strong fundamentals and will revive on account of various reform measures taken by the government.

On the global front, European markets were trading in red terrain, as Estonia's trade deficit increased in September, as exports fell and imports rise. The figures from Statistics Estonia showed that the trade deficit rose to EUR 157 million in September from EUR 84 million in the same month last year. In August, trade deficit was EUR 97 million. Asian markets ended lower, after Japan core machinery orders declined unexpectedly in September. The data from the Cabinet Office showed that core machinery orders, a leading indicator of private capital investment, declined 2.9 percent month-on-month, following a 2.4 percent drop in August.

Back home, coal industry stocks remained in watch, as latest Indian Ports Association report showed that thermal coal imports declined by 17.69 percent to 51.10 million tonnes at the country's top 12 major ports during April-October this fiscal. The Centre-owned ports had handled 62.08 MT of the thermal coal in the same period the previous year. Further, stocks related to steel sector also remained in focus, after Ministry of Steel unveiled the Steel Scrap Recycling Policy, with an aim to promote circular economy in the steel sector. The move aims to produce high quality ferrous scrap for quality steel production thus minimizing the dependency on imports.

Finally, the BSE Sensex gained 21.47 points or 0.05% to 40,345.08, while the CNX Nifty was up by 5.30 points or 0.04% to 11,913.45.

The BSE Sensex touched a high and a low 40,417.44 and 40,150.97, respectively and there were 15 stocks advancing against 15 stocks declining, while 1 stock remained unchanged on the index.

The broader indices remained in green; the BSE Mid cap index gained 0.29%, while Small cap index was up by 0.17%.

The top gaining sectoral indices on the BSE were Bankex up by 1.22%, PSU up by 1.10%, Oil & Gas up by 0.96%, Telecom up by 0.86% and Realty up by 0.79%, while IT down by 0.67%, FMCG down by 0.56%, Energy down by 0.47%, Auto down by 0.38% and TECK down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 5.80%, Tata Motors - DVR up by 2.44%, Tata Motors up by 1.68%, ICICI Bank up by 1.53% and Indusind Bank up by 1.50%. On the flip side, Hero MotoCorp down by 2.00%, Vedanta down by 1.90%, TCS down by 1.42%, Reliance Industries down by 1.21% and Asian Paints down by 1.09% were the top losers.

Meanwhile, Services Export Promotion Council (SEPC) has urged the Commerce Ministry to widen scope of Service Exports from India Scheme (SEIS) by including more services under it to promote the sector in overseas markets. The foreign trade policy provides tax incentives under SEIS to several services sector. SEPC Director-General Sangeeta Godbole said depending on the nature of services, the government gives duty credit scrips or certificates. She added that the scheme offers a reward at 5 percent or 7 percent of net foreign exchange earned and covers service providers located in India.

Godbole said the council together with the ministry is working on several steps to boost the exports. She also said that currently, nine broad categories of services are there in the list, including professional, communication, construction, educational, environmental, tourism and transport. She noted that incentives to services exporters under the scheme stood at Rs 4,262.8 crore during 2018-19 with a total of 6,376 number of SEIS scrips issued.

SEPC Director-General further stated that this incentive to exporters to offset infrastructural inefficiencies and associated costs involved to increase services export. She said scrips or certificates provided under the scheme can be used for payment of basic and additional customs duties on goods imported. She added that these are freely transferable and if an exporter is not in a position to use the scrip, they can sold in the open market.

The CNX Nifty traded in a range of 11,932.65 and 11,853.95. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 6.16%, Yes Bank up by 5.73%, BPCL up by 2.81%, GAIL India up by 2.48% and Tata Motors up by 1.72%. On the flip side, Nestle down by 2.37%, Hero MotoCorp down by 2.12%, Hindalco down by 2.11%, Vedanta down by 1.93% and Cipla down by 1.75% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 34.52 points or 0.47% to 7,324.86 and Germany’s DAX fell 39.91 points or 0.3% to 13,188.65, while France’s CAC increased 0.72 points or 0.01% to 5,890.42.

Asian markets ended lower on Monday on doubts about when the world's two largest economies may end a 16-month trade war. Chinese shares ended down on concerns over slowing growth and uncertainty around a proposed US-China trade deal after comments by President Trump that he hasn't agreed to a tariff rollback with China. Meanwhile, inflation data from China proved to be a mixed bag, with the consumer price index rising at its fastest pace in almost eight years, while a measure of producer prices fell the most in more than three years in October. Besides, Hong Kong shares closed lower after political tensions flared up in the city once again. Moreover, Japanese shares declined after data showed the country's core machinery orders fell for a third straight month in September, raising doubts over whether the recent strength in capital goods shipments would last.