Markets remain in red in late morning deals

Domestic equity markets continued to trade in red in late morning deals as traders booked some profits after the recent market rally. Slide in information technology stocks weighted on the markets. Market participants were reluctant to make significant moves as they looked ahead to meeting of Monetary Policy Committee (MPC) of the Reserve Bank of India that begin today i.e. June 6, and next week's US Federal Reserve meeting, where the Fed is widely expected to pause its recent series of interest rate hikes. There was some buzz in steel industry related stocks as the Centre is looking to include refractories in the upcoming Production Linked Incentive Scheme 2.0 for steel as it aims at doubling the country's production capacity for the metal to 300 million tonne by 2030.

On the global front, Asian markets were trading mostly higher despite weak cues from global markets overnight. Back home, on the BSE sectoral front, traders were seen pilling up position in Auto, Realty, Consumer Durables, Industrials and Bankex, while selling was witnessed in IT, TECK, Metal, Energy and Oil & Gas. 

The BSE Sensex is currently trading at 62649.03, down by 138.44 points or 0.22% after trading in a range of 62573.44 and 62851.55. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.25%, while Small cap index down by 0.01%.

The top gaining sectoral indices on the BSE were Auto up by 0.87%, Realty up by 0.42%, Consumer Durables up by 0.15%, Industrials up by 0.12% and Bankex up by 0.09%, while IT down by 2.08%, TECK down by 1.79%, Metal down by 0.65%, Energy down by 0.31% and Oil & Gas down by 0.28% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.96%, Maruti Suzuki up by 1.60%, Kotak Mahindra Bank up by 1.40%, Tata Motors up by 1.31% and Axis Bank up by 1.09%. On the flip side, Tech Mahindra down by 2.78%, Infosys down by 2.16%, Wipro down by 1.93%, HCL down by 1.87% and TCS down by 1.66% were the top losers.

Meanwhile, in view of spurt in the imports under a free trade agreement, the commerce ministry's investigation arm Directorate General of Trade Remedies (DGTR) has recommended increasing customs duty on 'Ferro Molybdenum', used in steel, nickel, cobalt alloys, from South Korea. The Comprehensive Economic Partnership Agreement (CEPA) between the two countries was implemented in January 2010.

In October 2022, India initiated the probe to ascertain if a spurt in the imports from South Korea is hitting the domestic producers. After concluding the probe, DGTR said the imports have increased in absolute terms and in relation to Indian production and total imports. It said the imports of Ferro Molybdenum increased when the customs duties were eliminated. It also said imports of the products from Korea have increased and constitute increased imports within the meaning of the rules and Korea-India CEPA. It added that due to the spurt in the inbound shipments, domestic industry has suffered a decline in profitability. It is thus considered appropriate to recommend bilateral safeguard measure, accordingly, the director general recommends increasing the rate of customs duty on imports. The measure is recommended for two years.

In the first year, according to DGTR, the duty should be increased by 100 per cent and 75 per cent in the second year. The Indian Ferro Alloy Producers' Association together with Boon Metal & Alloy Corporation, Premier Alloys & Chemicals, and Team Ferro Alloys had filed an application that an increase in imports of the product is causing serious injury to the domestic producers. The application was filed under the bilateral safeguard measures rules of the India-Korea free trade agreement. Under the pact, India has given customs duties concession on this product. 

The CNX Nifty is currently trading at 18558.45, down by 35.40 points or 0.19% after trading in a range of 18540.20 and 18618.05. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 1.87%, Maruti Suzuki up by 1.66%, Divi's Lab up by 1.42%, Kotak Mahindra Bank up by 1.38% and Tata Motors up by 1.38%. On the flip side, Tech Mahindra down by 2.83%, Infosys down by 2.12%, Wipro down by 1.81%, HCL down by 1.80% and TCS down by 1.70% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted added 12.23 points or 0.07% to 16,726.66, Hang Seng advanced 117.91 points or 0.61% to 19,226.41, Jakarta Composite gained 33.41 points or 0.5% to 6,666.85 and Nikkei 225 surged 292.4 points or 0.9% to 32,509.83. However, Shanghai Composite weakened 8.06 points or 0.25% to 3,224.38 and Straits Times fell 2.27 points or 0.07% to 3,186.74.