Domestic markets trade lower in early deals

Indian equity benchmarks made negative start on Wednesday tracking sell-off on Wall Street and mixed cues from Asian counterparts. Domestic markets are trading lower with cut of around one third of a percent each in early deals amid major selling in banking stocks. Persistent foreign fund outflows dented market sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 693.47 crore on September 26. As per a private report, FIIs have sold about $1.6 billion in Indian equities in September, the most since January 2023. The report added this trend was driven by elevated valuations in the domestic market and negative global cues. However, buying interest in pharma stocks kept downside in check. Meanwhile, the central government has decided to stick to its market borrowing plan of Rs 6.55 trillion in the second half (October-March) of financial year 2023-24 (H2FY24). 

On the global front, Asian markets are trading mixed with traders remaining cautious after the US Fed recently forecast another rate hike before the end of the year and keeping rates at elevated levels for longer than previously anticipated. Back home, shares of online gaming are in focus amid reports that the tax demand from these firms could top Rs 1 lakh crore. There will be some reaction in diamonds industry related stocks as rating agency Icra said India's export of cut and polished diamonds is projected to decline by 22 per cent to $17.2 billion in the current fiscal due to weakened demand from the key consuming nations. 

In stock specific developments, Vedanta dropped after Moody's Investors Service downgraded the corporate family rating for Anil Agarwal-promoted Vedanta Resources in the absence of any meaningful progress on refinancing its upcoming debt maturities. However, 3I Infotech jumped on order win from Ujjivan.

The BSE Sensex is currently trading at 65759.85, down by 185.62 points or 0.28% after trading in a range of 65690.56 and 65925.64. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.43%, while Small cap index was up by 0.50%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.97%, Realty up by 0.65%, Telecom up by 0.55%, Industrials up by 0.44% and PSU up by 0.24%, while Consumer Durables down by 0.39%, Bankex down by 0.37%, Auto down by 0.24%, Metal down by 0.21%, FMCG down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 0.84%, Indusind Bank up by 0.71%, JSW Steel up by 0.46%, Larsen & Toubro up by 0.33% and Reliance Industries up by 0.19%. On the flip side, HDFC Bank down by 0.78%, Nestle down by 0.75%, Bajaj Finance down by 0.74%, ICICI Bank down by 0.71% and Titan Company down by 0.62% were the top losers.

Meanwhile, in a major boost to exports, the government has extended export benefits under the RoDTEP scheme for one more year till June 2024. The Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) provides for refund of taxes, duties and levies that are incurred by exporters in the process of manufacturing and distribution of goods and are not being reimbursed under any other mechanism at the centre, state or local level. The scheme is operational since September 2021. This scheme is a replacement for the Merchandise Exports from India Scheme (MEIS) which ended last year. At present, over 10,342 export items get the RoDTEP benefits.

The Directorate General of Foreign Trade said the RoDTEP scheme is extended for exports made from October 1, 2023, and shall be applicable till June 30, 2024. Under the scheme, support of Rs 27,018 crore has been extended till March 31, 2023, so far. It operates under a budgetary framework and an amount of Rs 15,070 crore is available to support 10,610 products for 2023-24. It will help the exporting community to negotiate export contracts in the present international environment on better terms.

The RoDTEP Committee has again been constituted in the Department of Revenue to review and recommend the ceiling rates under the RoDTEP Scheme for different export sectors. The Committee discussed the methodology and other issues relating to the Scheme and its implementation. The EPCs (export promotion councils) in their observations emphasized the need for enhancing the RoDTEP budget allocation and for higher rates to be made available to all export items to help them secure greater market access abroad.

The CNX Nifty is currently trading at 19616.05, down by 48.65 points or 0.25% after trading in a range of 19596.50 and 19649.55. There were 19 stocks advancing against 30 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 2.14%, Divi's Lab up by 1.86%, Cipla up by 1.76%, LTIMindtree up by 0.92% and Adani Ports & SEZ up by 0.84%. On the flip side, Eicher Motors down by 0.83%, HDFC Bank down by 0.82%, ICICI Bank down by 0.79%, Bajaj Finance down by 0.72% and Nestle down by 0.72% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 122.13 points or 0.38% to 32,192.92, Straits Times fell 26.43 points or 0.82% to 3,188.64, Taiwan Weighted lost 23.54 points or 0.14% to 16,252.53 and KOSPI was down by 8.77 points or 0.36% to 2,454.20. On the other hand, Hang Seng advanced 111.03 points or 0.63% to 17,577.93, Jakarta Composite gained 15.03 points or 0.22% to 6,938.83 and Shanghai Composite was up by 10.27 points or 0.33% to 3,112.54.