Weak trade continues over Dalal Street

Weak trade continued over the Dalal Street in late morning session, with both Sensex and Nifty trading in red terrain. Negative cues from other Asian markets impacted domestic sentiments. Traders got cautious, after the commerce ministry said that sellers who do not declare local content percentage while uploading their products at public procurement portal GeM will lose out on business and will not be able to participate in bids in which buyer has chosen to procure only made-in-India items. Besides, the Reserve Bank of India (RBI) in its ‘State of the Economy’ report June bulletin has said that it sees reasons to be cautiously optimistic as the second wave of the pandemic seems to have hit domestic demand, while other economic indicators show the economy is coming back on stream.

On the global front, Asian markets were trading mostly in red, after the value of Singapore's non-oil domestic exports were down a seasonally adjusted 0.1 percent on month in May, Enterprise Singapore said on Thursday - coming in at SGD15.4 billion. That was well shy of expectations for an increase of 4.7 percent following the 8.8 percent decline in April. On a yearly basis, NODX climbed 8.8 percent - missing forecasts for an increase of 16.0 percent following the 6.0 percent increase in the previous month.

The BSE Sensex is currently trading at 52351.63, down by 150.35 points or 0.29% after trading in a range of 52099.72 and 52523.88. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.67%, while Small cap index was up by 0.22%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.28%, Energy up by 0.16%, IT up by 0.13%, Oil & Gas up by 0.11% and TECK up by 0.07%, while Power down by 1.97%, Utilities down by 1.07%, Metal down by 0.99%, Industrials down by 0.81% and Bankex down by 0.79% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.66%, Asian Paints up by 1.05%, Nestle up by 1.00%, Reliance Industries up by 0.52% and Infosys up by 0.41%. On the flip side, HDFC down by 1.25%, Maruti Suzuki down by 1.16%, Axis Bank down by 1.09%, NTPC down by 1.04% and ONGC down by 0.99% were the top losers.

Meanwhile, in order to keep the price of crop nutrients for farmers low despite the rising costs, the Union Cabinet has raised the subsidies for Di-Ammonium Phosphate (DAP) and some other non-urea fertilisers by Rs 14,775 crore. The move will also help in providing relief to the farmers amid the pandemic. After urea, DAP fertiliser is the most widely used one in the country. Recently, the Centre decided to increase subsidy on DAP fertiliser by 140 per cent. The decision was taken at a high-level meeting chaired by Prime Minister Narendra Modi.

Minister of State for Chemicals and Fertilisers Mansukh Mandaviya stated the Cabinet Committee on Economic Affairs (CCEA) has approved increasing the subsidy amount for DAP fertiliser for the benefits of farmers. He added that farmers will continue to get DAP at the old rate of Rs 1,200 per bag. The move will help in ensuring that farmers gets the key soil nutrient at the old rate despite the surge in global prices. One bag has 50 kilograms of the fertiliser.

According to him, the subsidy for DAP fertiliser has been increased to Rs 1,200 per bag from Rs 500 per bag to provide relief to farmers. The minister also said the additional subsidy burden on the exchequer will be Rs 14,775 crore. The government has allocated nearly Rs 79,600 crore for fertiliser subsidies in the 2021-22 Budget. Last year, the actual price of DAP was Rs 1,700 per bag, on which the central government was giving a subsidy of Rs 500. The companies were therefore selling the fertiliser to farmers for Rs 1,200 per bag.

With rise in global prices, the actual price of DAP reached Rs 2,400 per bag. In order to ensure that the farmers get DAP at the old rate of Rs 1,200 per bag, the Centre has decided to increase the subsidy to Rs 1,200 per bag. Mandaviya said that in the case of urea, the MRP (Maximum Retail Price) is fixed while the subsidy amount keeps changing. On an average, he said the government is providing Rs 900 per bag subsidy on urea. However, he said the government provides a fixed amount of subsidy on non-urea fertilisers, including DAP.

The CNX Nifty is currently trading at 15723.30, down by 44.25 points or 0.28% after trading in a range of 15644.70 and 15769.35. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 1.63%, Shree Cement up by 1.19%, Nestle up by 1.13%, Asian Paints up by 1.10% and Reliance Industries up by 0.70%. On the flip side, Adani Ports & SEZ down by 6.16%, Tata Steel down by 2.09%, Hero MotoCorp down by 1.65%, Coal India down by 1.38% and Maruti Suzuki down by 1.32% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 298.21 points or 1.02% to 28,992.80, KOSPI fell 14.23 points or 0.43% to 3,264.45, Jakarta Composite lost 13.17 points or 0.22% to 6,065.40 and Taiwan Weighted dropped 12.12 points or 0.07% to 17,295.74. On the flip side, Shanghai Composite gained 6.98 points or 0.2% to 3,525.31, Straits Times advanced 9.21 points or 0.29% to 3,148.78 and Hang Seng increased 66.20 points or 0.23% to 28,503.04.