Markets extend opening losses in early deals; Nifty slips below 18,700 mark

Indian equity benchmarks extended their previous session’s southward journey with pessimistic start on Tuesday. Investors remained cautious in line with broadly negative cues from Asian counterparts after China's central bank did not introduce further stimulus as speculated to prop up its flagging economic recovery. Traders also looked ahead to US Fed Chair Jerome Powell's congressional testimonies on Wednesday and Thursday for clues on the monetary policy ahead. At this point of trade, domestic indices extend their losses and are trading in red with cut of around 0.40% each due to profit booking after recent gains. Foreign fund outflows dented domestic sentiments. As per the data, foreign institutional investors (FII) sold shares worth Rs 1,030.90 crore on June 19. 

Some cautiousness also came in with report that the UK’s decision to withdraw duty benefit scheme GSP may impact Indian exporters from certain labour-intensive sectors such as leather and textiles as they were the major beneficiaries. The UK is replacing the Generalised Scheme of Preferences (GSP) with a new Developing Countries Trading Scheme (DCTS) from June 19. In stock specific developments, HDFC AMC jumped as abrdn reportedly exits company via block deal. However, IIFL Securities skid as SEBI bars firm from onboarding new clients for 2 years.

The BSE Sensex is currently trading at 62906.11, down by 262.19 points or 0.42% after trading in a range of 62859.98 and 63186.33. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.01%, while Small cap index was up by 0.03%.

The top gaining sectoral indices on the BSE were Power up by 0.37%, Utilities up by 0.33%, Consumer Durables up by 0.20%, IT up by 0.09% and Metal up by 0.08%, while Oil & Gas down by 0.43%, FMCG down by 0.42%, Energy down by 0.38%, Bankex down by 0.38%, Capital Goods down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 0.76%, Wipro up by 0.68%, NTPC up by 0.27%, Infosys up by 0.20% and Tata Steel up by 0.18%. On the flip side, Bajaj Finance down by 1.45%, Bajaj Finserv down by 1.03%, Hindustan Unilever down by 1.03%, Asian Paints down by 1.01% and Mahindra & Mahindra down by 0.95% were the top losers.

Meanwhile, expressing concern, Global Trade Research Initiative (GTRI) said the UK's decision to withdraw duty benefit scheme GSP may impact Indian exporters from certain labour-intensive sectors such as leather and textiles as they were the major beneficiaries. The UK is replacing the Generalised Scheme of Preferences (GSP) with a new Developing Countries Trading Scheme (DCTS) from June 19. Labour intensive sectors, including certain textile items, leather goods, carpets, iron & steel goods and chemicals may get impacted due to this.

GTRI said the US, European Union (EU), Australia, Japan and many other developed countries grant unilateral import duty concessions to developing countries under their GSP schemes. GTRI co-founder Ajay Srivastava said ‘as the UK has come out of the EU, it has designed its own GSP scheme. Each country sets a product-wise threshold limit, if a country's exports cross the limit, the GSP concessions stop. The UK withdrawing GSP concessions on labour intensive products was expected as the two countries are negotiating a free trade agreement’.

GSP concessions are available in full to exports from Least Developed Countries(LDCs). China does not get such concessions. He added that the firms, associations and countries request for restoration of concessions but it is rarely considered. He said ‘since the concessions are small, India should stop participating in GSP schemes and stand tall like China does. GSPs are vestiges of colonial mind-set and should be used by only LDCs’. India's exports worth USD 2.5 billion are entitled for the GSP benefit in the UK.

The CNX Nifty is currently trading at 18688.20, down by 67.25 points or 0.36% after trading in a range of 18668.90 and 18761.20. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were HDFC Life Insurance up by 1.91%, SBI Life Insurance up by 1.29%, Adani Enterprises up by 0.82%, Power Grid up by 0.82% and Wipro up by 0.70%. On the flip side, Bajaj Finance down by 1.61%, Hindustan Unilever down by 1.13%, Bajaj Finserv down by 1.10%, Mahindra & Mahindra down by 0.97% and Asian Paints down by 0.88% were the top losers.

All Asian markets are trading lower; Hang Seng declined 303.22 points or 1.55% to 19,609.67, Nikkei 225 slipped 113.84 points or 0.34% to 33,256.58, Taiwan Weighted lost 63.97 points or 0.37% to 17,210.59, Jakarta Composite plunged 30.01 points or 0.45% to 6,656.05, Straits Times fell 15.72 points or 0.49% to 3,225.45, Shanghai Composite weakened 5.92 points or 0.18% to 3,249.89 and KOSPI was down by 2.92 points or 0.11% to 2,606.58.