Domestic indices trim opening losses to trade tad lower in early deals

Indian equity benchmarks made gap-down opening on Tuesday tracking sell-off in the Asian peers. But, soon markets trimmed some of their losses and are trading slightly lower in early deals. Buying in Metal, Telecom and PSU were aiding the markets, whereas selling in Energy and Consumer stocks weighted on the indices. Traders were concerned as in the adverse case, ICRA projects fiscal deficit at a higher Rs 17.9 trillion, driven by the two major outlays intended to bolster confidence amongst households, namely free food grains under the PMGKAY scheme and an enhanced outgo for MGNREGA. However, downside remained capped as the commerce ministry said exports of engineering goods rose 54 per cent to $81.8 billion during April-December 2021-22 as compared to the same period of the previous year. In the corresponding nine-month period of 2020-21, exports stood at $52.9 billion. The sector accounted for over 27 per cent in India’s total exports basket during the period. Meanwhile, the Reserve Bank of India conducted an overnight variable rate repo auction under liquidity adjustment facility (LAF) Monday for an amount of Rs 75,000 crore.

On the global front, Asian markets are trading lower despite positive cues from Wall Street overnight after an initial sell-off, as traders are selling off stocks amid fears of inflation and policy tightening by the US Federal Reserve. Concerns over the rapid spread of the coronavirus omicron variant in the region is also denting market sentiment, with strict restriction placed in some countries and its impact on the global economy. Back home, agriculture industry related stocks were in focus as the Union Food Ministry said the Centre has procured 606.19 lakh tonne of paddy in the ongoing 2021-22 marketing season so far, with maximum quantities being purchased from Punjab. Stock specific development, Bharti Airtel traded higher as its board is scheduled to meet on Friday to evaluate a fund raising proposal.

The BSE Sensex is currently trading at 57373.28, down by 118.23 points or 0.21% after trading in a range of 56409.63 and 57419.67. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.59%, while Small cap index was up by 0.77%.

The top gaining sectoral indices on the BSE were Metal up by 1.34%, Telecom up by 1.14%, PSU up by 0.97%, Power up by 0.92%, Utilities up by 0.87%, while Energy down by 1.15%, Consumer Durables down by 0.52% were the only losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 4.02%, Indusind Bank up by 1.79%, Tata Steel up by 1.72%, Bharti Airtel up by 1.43% and Power Grid Corp up by 1.29%. On the flip side, Reliance Industries down by 1.77%, Asian Paints down by 1.27%, HDFC Bank down by 1.19%, HDFC down by 0.90% and Titan Co down by 0.87% were the top losers.

Meanwhile, the Commerce Ministry said exports of engineering goods rose 54 per cent to $81.8 billion during April-December 2021-22 as compared to $52.9 billion in the corresponding nine-month period of 2020-21. The sector accounted for over 27 per cent in India’s total exports basket during the period. In entire 2020-21, exports from the sector was $76.62 billion.

It said ‘with the sector already logging $81.8 billion in the first three quarters of 2021-22, the sector is set to scale further record highs despite the impact of the COVID-19 pandemic in January, 2020’. India’s top five export destinations for engineering goods include the US, China, the UAE, Italy and Germany. The ministry added that the zero duty Export Promotion Capital Goods (EPCG) scheme has helped in pushing up the exports.

The scheme allows import of capital goods for pre-production, production and post-production (including completely knocked down/ semi knocked down thereof as well as computer software systems) at zero customs duty, subject to an export obligation equivalent to six times of duty saved on capital goods imported under the scheme, to be fulfilled in six years reckoned from authorization issue-date. The engineering goods sector comprises metal products, industrial machinery and equipment, automobiles and its components, transport equipment, bicycles, medical devices and renewable equipment.

The CNX Nifty is currently trading at 17104.40, down by 44.70 points or 0.26% after trading in a range of 16836.80 and 17142.35. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 4.03%, Hero MotoCorp up by 2.07%, JSW Steel up by 1.87%, Tata Steel up by 1.48% and Bharti Airtel up by 1.44%. On the flip side, Reliance Industries down by 2.17%, HDFC down by 1.23%, Asian Paints down by 1.19%, Wipro down by 1.15% and HDFC Bank down by 1.12% were the top losers.

Asian markets are trading in red; Nikkei 225 plunged 553.38 points or 2.01% to 27,034.99, Straits Times declined 35.98 points or 1.10% to 3,247.37, Hang Seng slipped 308.72 points or 1.25% to 24,347.74, Taiwan Weighted lost 322.80 points or 1.79% to 17,666.24, KOSPI fell 79.81 points or 2.86% to 2,712.19, Jakarta Composite weakened 100.91 points or 1.52% to 6,554.26 and Shanghai Composite was down by 39.31 points or 1.12% to 3,484.80.