Bourses enter into positive territory in late afternoon session

Indian equity markets erased losses to enter into positive territory in late afternoon session following strong European markets cues. Traders took note of report that Directorate Generate of Foreign Trade (DGFT) in its latest notification has said that a limit has been imposed on total rewards under the Merchandise Exports from India Scheme (MEIS). The total reward which may be granted to an IEC (Import Export Code) holder under the scheme shall not exceed Rs 2 crore per IEC of exports made in the period September 1, 2020 to December 31, 2020. Traders ignored Goods and Services Tax (GST) collection slipped by around 12% to Rs 86,449 crore in August as compared to Rs 98,202 crore in the same month last year.

On the global front, Asian markets are trading mixed as investors digested upbeat economic data from the US and China and reacted to the comments from US House Speaker Nancy Pelosi suggesting ‘serious differences’ over the coronavirus (Covid-19) aid package. European markets were trading higher with signs of a global economic recovery overshadowing weak German retail sales.

The BSE Sensex is currently trading at 38957.10, up by 56.30 points or 0.14% after trading in a range of 38736.22 and 39036.76. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.83%, while Small cap index was up by 1.27%.

The gaining sectoral indices on the BSE were Energy up by 1.69%, Power up by 1.47%, Telecom up by 1.31%, Industrials up by 1.15% and TECK was up by 1.06%, while Realty down by 0.81%, Bankex down by 0.56%, Consumer Durables down by 0.42%, PSU down by 0.13% and Auto was down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.64%, HCL Tech up by 1.89%, Reliance Industries up by 1.87%, Tech Mahindra up by 1.57% and Indusind Bank up by 1.30%. On the flip side, Bajaj Auto down by 3.00%, Asian Paints down by 2.14%, Sun Pharma down by 1.76%, Axis Bank down by 1.62% and ICICI Bank down by 1.51% were the top losers.

Meanwhile, the Directorate Generate of Foreign Trade (DGFT) in its latest notification has said that a limit has been imposed on total rewards under the Merchandise Exports from India Scheme (MEIS).  The total reward which may be granted to an IEC (Import Export Code) holder under the scheme shall not exceed Rs 2 crore per IEC of exports made in the period September 1, 2020 to December 31, 2020.

Further, it has been notified that any IEC holder who has not made any exports for a period of one year preceding September 1, 2020 or any new IECs obtained on or after the date of publication of this notification would not be eligible for submitting any claim under this scheme. The DGFT also said that the MEIS will be withdrawn with effect from January 1, 2021.

Meanwhile, it is estimated that 98 per cent of the exporters’ claim of MEIS will be unaffected by the changes.  The unaffected exporters who have already factored in MEIS in the pricing of their products do not face any change or uncertainty since neither coverage of products nor rates of MEIS will be changed.  An advance notice of 4 months of the end date of MEIS provides certainty for the future pricing decisions.

The CNX Nifty is currently trading at 11504.00, up by 33.75 points or 0.29% after trading in a range of 11430.40 and 11520.45. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 5.70%, Mahindra & Mahindra up by 4.60%, Bharti Infratel up by 4.50%, Adani Ports up by 3.99% and Coal India up by 2.44%. On the flip side, Bajaj Auto down by 2.78%, Hero MotoCorp down by 2.26%, Asian Paints down by 2.18%, Grasim Industries down by 1.67% and Sun Pharma down by 1.60% were the top losers.

Asian markets are trading mixed; Hang Seng decreased 64.76 points or 0.26% to 25,120.09, Shanghai Composite declined 5.81 points or 0.17% to 3,404.80, Straits Times trembled 5.60 points or 0.22% to 2,532.95, Taiwan Weighted dropped 3.78 points or 0.03% to 12,699.50. On the flip side, Jakarta Composite soared 1.29 points or 0.02% to 5,311.97, KOSPI rose 14.82 points or 0.63% to 2,364.37 and Nikkei 225 was up by 109.08 points or 0.47% to 23,247.15.

European markets were trading higher; UK’s FTSE 100 increased 98.91 points or 1.69% to 5,960.96, France’s CAC increased 105.00 points or 2.13% to 5,043.10 and Germany’s DAX was down by 263.37 points or 2.03% to 13,237.62.