Key gauges trade lower in morning deals

Indian equity benchmarks were trading in red in morning deals led by weakness in Realty, Energy, Auto and IT stocks. Sentiments remained downbeat even as Managing Director of IMF Kristalina Georgieva stating that the Union budget presented by Finance Minister Nirmala Sitharaman is a very 'thoughtful' policy agenda for India and puts a great deal of emphasis on innovation in research and development on human capital investment and digitalization. Traders also overlooked CBDT Chairman J B Mohapatra’s statement that direct tax collections are expected to breach the revised target of Rs 12.50 lakh crore and set an all-time high and historic record by the end of this financial year (FY22).

On the global front, Asian markets were trading in green as a rally in Hong Kong on its first day back from a break helped overcome a sharp drop on Wall Street, though a surprisingly hawkish tilt from the European Central Bank added fuel to fears about the removal of pandemic-era stimulus. Back home, on the sectoral front, Tyre industry’s stocks remained in watch as the All India Tyres Federation sought removal of anti-dumping duty on tyres and urged the government to lift import restrictions imposed after the Competition Commission of India's (CCI) order on domestic tyre manufacturers for indulging in price rigging and cartelisation.

The BSE Sensex is currently trading at 58643.84, down by 144.18 points or 0.25% after trading in a range of 58475.97 and 58943.62. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.15%, while Small cap index was up by 0.09%.

The top gaining sectoral indices on the BSE were Metal up by 1.48%, Basic Materials up by 0.93%, Utilities up by 0.82%, Power up by 0.63% and Consumer Durables up by 0.32%, while Realty down by 1.46%, Energy down by 0.74%, Auto down by 0.47%, IT down by 0.44% and TECK down by 0.43% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.46%, Tata Steel up by 1.29%, Indusind Bank up by 0.83%, HDFC Bank up by 0.82% and Sun Pharma up by 0.75%. On the flip side, Reliance Industries down by 1.01%, Wipro down by 0.77%, TCS down by 0.68%, Maruti Suzuki down by 0.65% and Mahindra & Mahindra down by 0.54% were the top losers.

Meanwhile, the All India Tyres Federation has sought removal of anti-dumping duty on tyres and urged the government to lift import restrictions imposed after the Competition Commission of India's (CCI) order on domestic tyre manufacturers for indulging in price rigging and cartelisation. In August 2018, the CCI had imposed a total fine of more than Rs 1,788 crore on Apollo Tyres, MRF, CEAT, Birla Tyres, JK Tyre & Industries and the Automotive Tyre Manufacturers Association (ATMA). They were found to have violated Section 3 of the Competition Act during 2011-12.

The Section prohibits anti-competitive agreements. An appeal was filed against the CCI order before the Madras High Court and the same was dismissed on January 6, 2022. The CCI said the Supreme Court has dismissed a petition filed by tyre companies.

All India Tyre Dealers Federation President S P Singh said ‘On February 2, 2022, the CCI had passed a final order dated May 31, 2018, against five tyre companies...and their association, Automotive Tyre Manufacturers Association (ATMA), for indulging in cartelization.’ He stated the tyre makers acted in concert to increase the prices of cross-ply/ bias tyres variants sold by each of them in the replacement market and to limit and control production and supply in the market, thereby contravening (certain) provisions of the Competition Act, 2002.

The CNX Nifty is currently trading at 17514.70, down by 45.50 points or 0.26% after trading in a range of 17480.30 and 17617.80. There were 16 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were ONGC up by 1.82%, Hindalco up by 1.63%, Ultratech Cement up by 1.49%, Divi's Lab up by 1.24% and Tata Steel up by 0.96%. On the flip side, Hero MotoCorp down by 1.72%, Tata Consumer Product down by 1.31%, Reliance Industries down by 1.22%, HDFC Life Insurance down by 1.08% and Eicher Motors down by 0.97% were the top losers.

Asian markets were trading in green; Nikkei 225 surged 161.06 points or 0.59% to 27,402.37, Hang Seng increased 645.05 points or 2.71% to 24,447.31, Jakarta Composite soared 24.13 points or 0.36% to 6,707.98, KOSPI rose 34.63 points or 1.28% to 2,742.45 and Straits Times advanced 6.27 points or 0.19% to 3,322.26.