Sensex, Nifty trade above neutral lines

Indian equity benchmarks were trading near their neutral lines in early afternoon deals, with both Sensex and Nifty marginally higher, aided by buying Realty and Healthcare counters. Investors got support, after Credit rating agency, India Ratings and Research (IndRa) in its latest report has maintained an overall stable rating outlook for large corporates for H2FY24, amid broad based recovery and improved balance sheets. Of the rated portfolio, 82% has a stable outlook as on October 31, 2023, unchanged year on year. Gains were limited, as there was cautious approach ahead of the US Fed Chair Jerome Powell's speeches later today and tomorrow.

On the global front, Asian markets were trading mostly in red, after Japan's leading index declined in September after recovering in August. The preliminary data from the Cabinet Office showed that the leading index, which measures future economic activity, fell to 108.7 in September from 109.2 in the previous month. On the other hand, the coincident index that measures the current economic situation edged up to 114.7 from 114.6 a month ago.

The BSE Sensex is currently trading at 64957.07, up by 14.67 points or 0.02% after trading in a range of 64851.06 and 65124.00. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.74%, while Small cap index was up by 0.72%.

The top gaining sectoral indices on the BSE were Realty up by 1.38%, Healthcare up by 1.08%, Oil & Gas up by 1.03%, Consumer Durables up by 0.96% and Energy up by 0.82%, while Bankex down by 0.41% was the only losing index on BSE.

The top gainers on the Sensex were Asian Paints up by 1.50%, Titan up by 1.37%, TCS up by 0.65%, Reliance Industries up by 0.58% and Maruti Suzuki up by 0.52%. On the flip side, ICICI Bank down by 1.28%, NTPC down by 0.86%, Power Grid down by 0.55%, Tata Steel down by 0.54% and Kotak Mahindra Bank down by 0.49% were the top losers.

Meanwhile, the Global Trade Research Initiative (GTRI) has said that the government should consider allowing the sale of products manufactured in Special Economic Zones (SEZs) in the domestic market on payment of duty foregone on inputs as that would help promote value addition. At present, units in SEZs are allowed to sell their products in the Domestic Tariff Area (DTA or domestic market) on payment of duties on an output basis (finished goods).

The GTRI said the government already allows DTA sales on payment of duty foregone on input basis to firms operating under the Manufacturing and Other Operations in Warehouse Regulations (MOOWR) scheme. The government can extend the same concession to the SEZs for parity sake. This will encourage value addition within the SEZ, as in most cases, the tariff on finished products is higher than on inputs.

On demand of units in SEZs that they should be permitted to sell their products in the domestic market without paying import duties, it said this would distort the export focus as well as lead to a loss of revenue for the government. SEZ units are intended to be exportoriented. If goods from SEZs are allowed into the DTA on the same terms as free trade agreement imports, this might disincentivise exports and turn these zones into back doors for importing goods dutyfree for the domestic market, defeating the purpose of having exportfocused zones.

The CNX Nifty is currently trading at 19430.70, up by 24.00 points or 0.12% after trading in a range of 19401.50 and 19455.70. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.26%, Adani Ports & SEZ up by 2.31%, Asian Paints up by 1.61%, Cipla up by 1.53% and Titan up by 1.46%. On the flip side, ICICI Bank down by 1.28%, NTPC down by 0.96%, HDFC Life Insurance down by 0.63%, Kotak Mahindra Bank down by 0.58% and Apollo Hospital down by 0.56% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 67.86 points or 0.39% to 17,602.30, Jakarta Composite plunged 64.52 points or 0.95% to 6,779.27, Straits Times fell 49.14 points or 1.57% to 3,124.67, Shanghai Composite weakened 4.9 points or 0.16% to 3,052.37, KOSPI dropped 22.34 points or 0.92% to 2,421.62 and Nikkei 225 slipped 105.34 points or 0.33% to 32,166.48, while Taiwan Weighted added 55.88 points or 0.33% to 16,740.83.