Local equities trade flat with negative bias

Following weak global cues, local equity benchmarks were trading flat with a negative bias in morning session, owing to selling pressure in frontline blue-chip counters. Most IT companies such as HCL Tech, Tech Mahindra and Infosys occupied the bottom positions in the Sensex table. Traders turned pessimistic with International Monetary Fund’s report that India is now in the middle of a significant economic slowdown, urging the government to take immediate policy actions to tackle the current prolonged downturn. However, losses further remain capped as the newly formed Cabinet Committee on Investment and Growth held its first meeting on December 23 as the government looked at boosting spending to bring back a sputtering economy on track. Beside, Reserve Bank purchased Rs 10,000 crore worth of long-term government securities and sold Rs 6,825 crore of four short-term securities through the special open market operations (OMOs).

On the global turf, Asian markets are trading lower, as the holiday lull offset optimism that a US-China trade deal will boost exports and corporate earnings. Back home, PHD Chamber of Commerce and Industry (PHDCCI) President D K Aggarwal has said that the new criteria for definition of micro, small and medium enterprises (MSMEs) on the basis of turnover will help in promoting the ease of doing business as the process of identification and dealings with such entities will become simpler and faster.

The BSE Sensex is currently trading at 41614.32, down by 28.34 points or 0.07% after trading in a range of 41599.90 and 41702.98. There were 19 stocks advancing against 11 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading mixed; the BSE Mid cap index declined 0.01%, while Small cap index was up by 0.05%.

The gaining sectoral indices on the BSE were Power up by 0.43%, Consumer Durables up by 0.34%, Utilities up by 0.33%, Telecom up by 0.26%, Auto up by 0.26% while, IT down by 0.54%, Energy down by 0.46%, TECK down by 0.40%, Healthcare down by 0.29%, Oil & Gas down by 0.08% were the losing indices on BSE.

The top gainers on the Sensex were IndusInd Bank up by 2.11%, ONGC up by 1.08%, NTPC up by 0.96%, Hero MotoCorp up by 0.84% and Maruti Suzuki was up by 0.65%. On the flip side, HCL Tech down by 1.90%, Reliance Industries down by 0.78%, Tech Mahindra down by 0.68%, SBI down by 0.65% and Infosys was down by 0.54% were the top losers.

Meanwhile, with an aim to make steel industry competitive, Union minister Dharmendra Pradhan has said the government will soon come out with a white paper on steel industry. The white paper will focus on lessening the burden of taxes, cess and other duties on the local steel industry, besides studying the global models. He mentioned that the task will be completed in three-four months with the help of NITI Aayog and other ministries concerned.

Recently, the issue of taxes in the steel sector was a part of a panel discussion on 'India: Roadmap To A $5 Trillion Economy'. It was informed that the production cost of steel in India is the highest and one of the major factors contributing to this is the taxes. Royalty is close to 20 per cent on the input material, whether it is coal or iron ore. Freight cost is higher than what is being paid in other countries. Electricity also adds to the high production cost.

As per industry estimates, in India, average production cost of per tonne steel is about $450, whereas in China, where players get benefit of low tax and incentives, it is as low as $350. To provide more relief, Pradhan said the government is bringing changes to the Electricity Act which will address concerns related to power tariffs.
The CNX Nifty is currently trading at 12255.60, down by 7.15 points or 0.06% after trading in a range of 12250.25 and 12283.70. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.32%, IndusInd Bank up by 2.11%, Zee Entertainment up by 1.49%, ONGC up by 1.20% and NTPC was up by 0.96%. On the flip side, HCL Tech down by 1.74%, Reliance Industries down by 0.77%, Tech Mahindra down by 0.69%, SBI down by 0.68% and Wipro was down by 0.65% were the top losers.

Asian markets are trading lower, Hang Seng decreased 42.20 points or 0.15% to 27,864.21, Taiwan Weighted dropped 40.16 points or 0.33% to 11,982.07, KOSPI fell 11.21 points or 0.51% to 2,192.50 and Nikkei 225 was down by 0.27 points or 0% to 23,820.84.

On the other side, Shanghai Composite gained 7.36 points or 0.25% to 2,970.11, Straits Times was up by 7.67 points or 0.24% to 3,221.67.