Weak trade continues on Dalal Street in late morning deals

Weak trade continued over the Dalal Street in late morning session, with both Sensex and Nifty trading below their neutral lines. Negative cues from other Asian markets were impacting domestic sentiments. Traders were negative, even after the government said it has set up a 22-member inter-ministerial committee for strengthening India's capital goods sector through interventions that help it in contributing more actively towards achieving the target of a $5 trillion economy and a $1 trillion manufacturing sector. The committee will look into issues pertaining to the capital goods (CG) sector, including technology development, mother technology development, global value chains, testing, skill training, global standards, reciprocity issues and custom duties to make the sector globally competitive and to become the manufacturing hub for the world.

On the global front, Asian markets were trading lower, after Japan core machinery orders declined more than expected in September weighing on the prospects of a sustained recovery in business investment. Core machinery orders declined 4.4 percent on a monthly basis, in contrast to a 0.2 percent rise in August. This was the first fall in three months and worse than forecast of 0.7 percent drop. Year-on-year, core machinery orders were down 11.5 percent versus an expected fall of 11.6 percent.

The BSE Sensex is currently trading at 43353.37, down by 240.30 points or 0.55% after trading in a range of 43250.34 and 43543.96. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.49%, while Small cap index was up by 1.03%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.10%, Healthcare up by 0.95%, Industrials up by 0.93%, Realty up by 0.88% and Consumer Durables up by 0.62%, while Bankex down by 1.42%, PSU down by 0.88%, Metal down by 0.72%, Utilities down by 0.40% and Oil & Gas down by 0.36% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.41%, Titan Company up by 1.37%, Bajaj Finserv up by 0.99%, Bajaj Finance up by 0.90% and Hindustan Unilever up by 0.89%. On the flip side, SBI down by 1.88%, ONGC down by 1.80%, Kotak Mahindra Bank down by 1.79%, ICICI Bank down by 1.75% and HDFC down by 1.58% were the top losers.

Meanwhile, with aim to make Indian manufacturers competitive globally, the Union Cabinet has approved a Production-Linked Incentive (PLI) scheme for ten key sectors, including telecom, automobiles and pharmaceuticals, taking the total outlay for such incentives to nearly Rs 2 lakh crore over a five-year period. The scheme will help encourage domestic manufacturing, reduce imports and generate employment as the government works to bolster economic growth. The financial outlay for the new scheme will be Rs 1,45,980 crore.

Finance Minister Nirmala Sitharaman said the PLI scheme will provide great incentives for manufacturers and help the country move towards the objective of 'Aatmanirbhar Bharat' (Self-Reliant India). The Cabinet also decided to extend the viability gap funding scheme to social infrastructure sectors. The scheme is currently available only for projects concerning economic infrastructure. She said the PLI scheme will also provide encouragement to the critical sunrise sectors by ensuring necessary support from the government in addition to creating jobs and linking India to global value chain.

The 10 sectors that will be entitled to get the incentives include Advance Chemistry Cell (ACC) battery. It is entitled to get Rs 18,100 crore. Other sectors are electronics and technology products (Rs 5,000 crore); automobiles and auto components (Rs 57,042 crore); pharmaceuticals and drugs (Rs 15,000 crore); telecom and networking products (Rs 12,195 crore); textiles products (Rs 10,683 crore); food products (Rs 10,900 crore); high efficiency solar PV modules (Rs 4,500 crore); white goods (Rs 6,238 crore) and speciality steel (Rs 6,322 crore).

The CNX Nifty is currently trading at 12686.20, down by 62.95 points or 0.49% after trading in a range of 12659.50 and 12741.15. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Shree Cement up by 2.44%, Sun Pharma up by 1.66%, Titan Company up by 1.18%, Grasim Industries up by 1.17% and Bajaj Finserv up by 0.98%. On the flip side, Coal India down by 2.30%, SBI down by 2.09%, Kotak Mahindra Bank down by 1.91%, ICICI Bank down by 1.89% and ONGC down by 1.87% were the top losers.

Asian markets were trading lower; Nikkei 225 slipped 1.39 points or 0.01% to 25,348.21, Taiwan Weighted dropped 58.25 points or 0.44% to 13,203.94, Jakarta Composite lost 32.37 points or 0.59% to 5,477.14, KOSPI fell 17.65 points or 0.71% to 2,468.22, Shanghai Composite declined 6.78 points or 0.2% to 3,335.42, Straits Times trembled 9.91 points or 0.37% to 2,703.37 and Hang Seng decreased 120.36 points or 0.46% to 26,106.62.