Indian equities remain in red terrain

Indian equity benchmarks continued their trade in red territory in afternoon session, as selling momentum in the equities persisted. Cautiousness remained in markets with credit rating agency ICRA stating that muted economic growth, lower working capital requirements and risk aversion among lenders have compressed the incremental credit growth in current financial year (April 2019 to March 2020). However, the markets trimmed some of their losses, as traders found some support with Secretary in the DPIIT Guruprasad Mohapatra’s statement that enthused by a record foreign investment inflow, India is optimistic of continuing to be one of the world's favourite FDI destinations in 2020 on the back of the Modi government's liberalised norms and a significant jump in the ease of doing business ranking. On the sectoral front, Telecom stocks remained in focus as the government has decided to give 5G spectrum for trials to all players, including those partnering with Huawei. 

On the global front, Asian markets were trading mixed as investors locked in profits after a buoyant year of gains, driven in recent weeks by hopes of an imminent U.S.-China trade deal. Back home, the BSE Sensex is currently trading at 41447.59, down by 110.41 points or 0.27% after trading in a range of 41349.61 and 41607.49. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.04%, while Small cap index was up by 0.35%.

The top gaining sectoral indices on the BSE were Utilities up by 0.92%, Power up by 0.63%, PSU up by 0.59%, Realty up by 0.58% and Telecom was up by 0.33%, while Auto down by 0.57%, Energy down by 0.39%, Consumer Discretionary Goods & Services down by 0.37%, Bankex down by 0.22% and Capital Goods was down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.41%, Axis Bank up by 1.01%, Power Grid Corpn. up by 0.97%, Sun Pharma up by 0.58% and Titan Company was up by 0.51%. On the flip side, Tech Mahindra down by 1.74%, Bajaj Auto down by 1.26%, Indusind Bank down by 0.95%, Reliance Industries down by 0.79% and Asian Paints was down by 0.71% were the top losers.

Meanwhile, the government is working to formulate technical regulations, which includes safety and quality standards, for over 350 products, with an aim to cut the country's import bill of those non-essential items, promoting Make in India and promote sale of quality and standard goods in the market. The Department for Promotion of Industry and Internal Trade, Department of Telecommunication, Department of Chemicals, IT and electronics ministry and steel ministry was consulted for imposition of import regulations.

The government’s aim is to formulate these regulations for about 5,000 products but the current focus is on 371 items which accounts for $127 billion worth of imports. The 371 items include chemicals, steel, consumer electronics, heavy machinery, telecom goods, paper, rubber articles, glass, industrial machinery, metal articles, furniture, pharma, fertiliser, food, textiles. The Bureau of Indian Standards (BIS) has been tasked to prepare these regulations. India imports about 11,500 goods per year. BIS has also been asked to set up market surveillance mechanism on technical regulations for imported goods. In 2018-19, India's imports grew by 9 percent to $507.5 billion as compared to $465.6 billion in 2017-18.

The country's top import commodities include crude oil, gold, electronic goods, pulses, fertilisers, machine tools, and pharmaceutical products. High import bill pushes trade deficit which in turn impacts current account deficit. High imports also affect the country's foreign currency exchange rates. Further, the commerce ministry is also looking at non-tariff barriers being imposed by India's trading partners. Countries which impose one of the highest number of technical barriers to restrict imports include China, South Korea and Thailand.

The CNX Nifty is currently trading at 12221.10, down by 34.75 points or 0.28% after trading in a range of 12195.05 and 12247.10. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.09%, GAIL India up by 1.85%, NTPC up by 1.54%, Bharti Infratel up by 1.31% and Axis Bank was up by 1.05%. On the flip side, Zee Entertainment down by 1.90%, Tech Mahindra down by 1.79%, Bajaj Auto down by 1.27%, Indusind Bank down by 0.99% and Reliance Industries was down by 0.89% were the top losers.

Asian markets were trading mixed; Shanghai Composite gained 9.53 points or 0.31% to 3,049.55 and Straits Times was up by 0.39 points or 0.01% to 3,222.83. On the flips side, Taiwan Weighted dropped 56.23 points or 0.47% to 11,997.14 and Hang Seng was down by 129.64 points or 0.46% to 28,189.75.