Sensex, Nifty remain sluggish in late morning session

Indian equity benchmarks remained sluggish in late morning session with both Sensex and Nifty trading in red terrain. Negative cues from other Asian markets impacted sentiments over the Street. Domestic sentiments were also negative, amid reports that with goods and services tax (GST) officers under pressure to exceed the Rs 1-trillion collection mark per month, industry has faced a barrage of recovery notices and summons issued over the last one month across sectors. Industry bodies have claimed harassment by field officers, blocking of input tax credit, cancellation of GST registration, threats of arrest and steep penalties, impacting their working capital and operations.

On the global front, Asian markets were trading mostly in red, after China producer price inflation accelerated to a 13-year high in August on higher commodity prices, while consumer price inflation slowed unexpectedly. Producer prices advanced 9.5 percent annually, following an increase of 9 percent in July, the National Bureau of Statistics reported. The latest growth was the biggest since August 2008. Prices were forecast to climb again by 9 percent.

The BSE Sensex is currently trading at 58240.06, down by 10.20 points or 0.02% after trading in a range of 58112.20 and 58314.49. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.25%, while Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were Power up by 1.12%, Telecom up by 0.94%, FMCG up by 0.80%, Utilities up by 0.67% and Capital Goods up by 0.66%, while Realty down by 0.66%, IT down by 0.17%, Consumer Durables down by 0.14%, Bankex down by 0.14% and Healthcare down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were Nestle up by 1.94%, ITC up by 1.23%, Bharti Airtel up by 1.12%, Tata Steel up by 0.61% and Sun Pharma up by 0.54%. On the flip side, Ultratech Cement down by 0.95%, Axis Bank down by 0.93%, Bajaj Finance down by 0.73%, Titan Co down by 0.68% and Tech Mahindra down by 0.58% were the top losers.

Meanwhile, in order to boost domestic manufacturing of man-made fibres (MMF), garments, and technical textiles, the Union Cabinet has given green signal to the production-linked incentive (PLI) scheme for textiles for a budgetary outlay of Rs 10,683 crore. Incentives worth Rs 10,683 crore will be provided over five years for manufacturing these products. The scheme is focused at expanding MMFs and technical textiles' value chain and will help India regain its dominant status in the global textile trade, at a time when India's share of global exports has gradually declined over the years.

It is estimated that the scheme will attract fresh investment of more than Rs 19,000 crore, a cumulative turnover of over Rs 3 trillion, and create additional employment opportunities of more than 750,000 jobs in this sector. Technical textile is a new-age material that can be used for production of personal protective equipment kits, airbags, bulletproof vests, and can also be used in sectors such as aviation, defence, and infrastructure. MMFs, such as viscose, polyester, and acrylic, are made from chemicals. According to the Federation of Indian Export Organisations (FIEO), MMF apparels currently account for a fifth of India’s overall apparel exports.

Textile Minister Piyush Goyal said ‘So far, we have primarily focused on cotton textiles. Today, two-thirds of the international trade market is of man-made and technical textiles. In such a situation, India should also contribute to the entire ecosystem. The PLI scheme will make domestic companies global champions’. He added companies near tier 3 or 4 cities will be prioritised, and special attention will be given to how much employment can be generated. The scheme will also positively impact states like Gujarat, Uttar Pradesh, Maharashtra, Tamil Nadu, Punjab, Telangana, and Odisha, among others.

The CNX Nifty is currently trading at 17348.00, down by 5.50 points or 0.03% after trading in a range of 17307.00 and 17369.15. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were ONGC up by 3.07%, Nestle up by 2.22%, Tata Motors up by 1.51%, ITC up by 1.18% and Bharti Airtel up by 1.16%. On the flip side, SBI Life Insurance down by 3.74%, Axis Bank down by 0.97%, Ultratech Cement down by 0.91%, Shree Cement down by 0.79% and Bajaj Finance down by 0.77% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 422.26 points or 1.6% to 25,898.67, Nikkei 225 slipped 229.93 points or 0.76% to 29,951.28, KOSPI fell 46.41 points or 1.47% to 3,116.58, Taiwan Weighted dropped 0.17 points or 0.01% to 17,270.32 and Jakarta Composite lost 14.29 points or 0.24% to 6,011.73. On the flip side, Shanghai Composite gained 3.40 points or 0.09% to 3,678.59 and Straits Times advanced 4.32 points or 0.14% to 3,073.26.