Markets continue to trade flat with negative bias

Key Indian benchmarks continued to trade flat with a negative bias in early noon session. Traders were seen in selling position for Bankex, Capital Goods and Energy stocks, while buying was witnessed in Metal, FMCG and Consumer Discretionary stocks. Sentiments got undermined with a monthly survey highlighting that retail inflation rose to about five-and-half year high of 7.35% in December 2019, surpassing the RBI's comfort level, mainly due to spiralling prices of vegetables as onions were selling costlier. However, downfall remain capped with report that the government is expected to address the issue of inverted duty structure, especially in sectors such as chemicals and electronics, in the forthcoming Budget, to boost manufacturing as part of the 'Make In India' campaign. Inverted duty structure refers to taxation of inputs at higher rates than finished products that results in build-up of credits and cascading costs.

On global front, most of the Asian equity benchmarks were trading higher followed by reports that the US took off China’s currency manipulator label, with remarks that it has made 'enforceable commitments' not to devalue the Yuan. Back home, the yield on 10 year government of India bonds, benchmark paper, surged as all India consumer inflation gallops to over seven per cent mark for the month of December 2019.

The BSE Sensex is currently trading at 41825.32, down by 34.37 points or 0.08% after trading in a range of 41770.90 and 41903.36. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.65%, while Small cap index was up by 0.73%.

The top gaining sectoral indices on the BSE were Metal up by 1.23%, FMCG up by 0.81%, Consumer Discretionary up by 0.66%, Basic Materials up by 0.66% and Healthcare was up by 0.65%, while Bankex down by 0.53%, Capital Goods down by 0.32%, Energy down by 0.32% and Industrials was down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.63%, TCS up by 1.41%, Hero MotoCorp up by 1.29%, ITC up by 0.96% and HCL Tech was up by 0.66%. On the flip side, ONGC down by 1.08%, Larsen & Toubro down by 1.00%, Kotak Mahindra Bank down by 0.97%, SBI down by 0.82% and ICICI Bank was down by 0.71% were the top losers.

Meanwhile, India has imposed anti-subsidy duty on the imports of 'continuous cast copper wire rods' for a period of five years from Indonesia, Malaysia, Thailand and Vietnam. The commerce ministry’s investigation arm Directorate General of Trade Remedies (DGTR) has recommended the duty after concluding an investigation that these imports have impacted domestic players. In a notification, the finance ministry said that it has imposed the anti-subsidy or countervailing duty after considering the final findings of the DGTR.

In its probe, the DGTR had concluded that the products have been exported to India from these countries at subsidised prices. Last year, domestic players had filed an application before the directorate stating alleged subsidisation of the products from these four nations, and requested the initiation of an anti-subsidy investigation. It had stated that the domestic industry has suffered material injury due to subsidisation of the product and the injury has been caused by the subsidised imports of the goods originating in or exported from these countries.

The duty imposed was in the range between 2.47 per cent and 10.27 per cent on the landed value of the product in India. The petitioners had alleged that the producers/exporters of the goods in these countries have benefitted from the actionable subsidies provided at various levels by the governments of these countries.

The CNX Nifty is currently trading at 12327.70, down by 1.85 points or 0.02% after trading in a range of 12308.70 and 12349.75. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.87%, Britannia Industries up by 2.00%, Zee Entertainment up by 1.70%, Tata Steel up by 1.59% and TCS was up by 1.44%. On the flip side, Yes Bank down by 6.65%, ONGC down by 1.12%, Larsen & Toubro down by 1.03%, Kotak Mahindra Bank down by 0.96% and UPL was down by 0.93% were the top losers.

Asian markets were trading mostly in green, KOSPI rose 8.12 points or 0.36% to 2,237.38, Straits Times advanced 13.23 points or 0.41% to 3,264.30, Nikkei 225 surged 155.53 points or 0.65% to 24,006.10, Taiwan Weighted strengthened 66.39 points or 0.55% to 12,179.81 and Jakarta Composite was up by 9.55 points or 0.15% to 6,306.12.

On the other hand, Hang Seng decreased 51.21 points or 0.18% to 28,903.73 and Shanghai Composite was down by 0.45 points or 0.01% to 3,115.12.