Weakness persists in markets; Nifty below 12,200 mark

Indian benchmark indices continued to trade in red in afternoon session due to selling in frontline blue chip stocks amid weak global cues. The mood on the street remained cautious with Nobel laureate and economist Abhijit Banerjee’s statement the banking sector in the country is ‘stressed’ and the government is in no position to bail it out. He said the demand slowdown in the automobile sector also shows that people are lacking confidence in the economy. Some pessimism also came in with private report stating that India's corporate and income tax collection for the current year is likely to fall for the first time in at least two decades, amid a sharp fall in economic growth and cut in corporate tax rates. However, further fall got restricted as some support came with IMF chief Kristalina Georgieva’s statement that growth slowdown in India appears to be temporary and she expects the momentum to improve going ahead. On the sectoral front, jewellery stocks remained in focus with the commerce ministry data showing that gold imports fell 6.77% to $23 billion during the April-December period of the current financial year.

On the global front, Asian markets were trading in red as China announced sharp increases in the number of people affected in an outbreak of a potentially deadly virus. Many regional markets, including China's, were closed in Asia for Lunar New Year holidays. Australia was closed for Australia Day. Back home, the BSE Sensex is currently trading at 41430.63, down by 182.56 points or 0.44% after trading in a range of 41323.29 and 41516.27. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.55%, while Small cap index was up by 0.57%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.03%, Realty up by 0.67%, Auto up by 0.64%, Consumer Discretionary up by 0.55% and Consumer Durables was up by 0.26%, while Metal down by 2.42%, Telecom down by 0.97%, TECK down by 0.73%, IT down by 0.67% and PSU was  down by 0.43% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.38%, ICICI Bank up by 1.65%, Ultratech Cement up by 1.24%, Axis Bank up by 1.04% and Maruti Suzuki was up by 1.04%. On the flip side, Tata Steel down by 3.12%, Kotak Mahindra Bank down by 1.56%, HDFC Bank down by 1.55%, Indusind Bank down by 1.33% and HDFC was down by 1.24% were the top losers.

Meanwhile, India and the US have decided to engage in talks in good faith to sort out the dispute over American import duties on certain Indian steel products, wherein Washington is yet to fully comply with the WTO rulings. The WTO dispute resolution body has ruled against the US in this case stating that the high duty imposed by America on certain hot-rolled carbon steel flat products from India was inconsistent with various provisions of the WTO's Agreement on Subsidies and Countervailing Measures. The US agreed to resolve the matter amicably as the appellate body of the WTO's dispute settlement mechanism has become dysfunctional since December 2019.

America has failed to fully comply with a six-year-old ruling of the WTO's dispute panel over import duties on certain Indian steel products which has endorsed India's belief that not only the practices followed by the US, the law itself violates WTO agreements. The compliance panel has found that the US has not complied with the rulings and recommendations of the dispute panel. India has dragged the US in WTO in 2012, alleging that Washington's move to impose high duties on imports of certain Indian steel products are global trade rules.

In December 2014, the WTO dispute panel had ruled against the US imposing high countervailing duties on imports of certain Indian steel products. Later the WTO's appellate body too ruled that the high duties imposed by the US were inconsistent with various provisions of the Agreement on Subsidies and Countervailing Measures. Then in June 2017, India again moved the WTO alleging that America has not fully complied with those rulings. India had stated that a reasonable period of time for the US to comply with the WTO's ruling had expired on April 18, 2016.

The CNX Nifty is currently trading at 12198.00, down by 50.25 points or 0.41% after trading in a range of 12154.60 and 12216.60. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.41%, Dr. Reddys Lab up by 2.10%, ICICI Bank up by 1.76%, Ultratech Cement up by 1.28% and Maruti Suzuki was up by 1.25%. On the flip side, JSW Steel down by 3.64%, Tata Steel down by 3.09%, Hindalco down by 2.65%, Vedanta down by 2.63% and HDFC Bank was down by 1.57% were the top losers.

Asian markets were trading in red, Nikkei 225 slipped 483.67 points or 2.03% to 23,343.51 and Jakarta Composite lost 79.91 points or 1.28% to 6,164.20.