Weak trade persists over Dalal Street

A weak trade persisted over the Dalal Street in late afternoon deals, with both Sensex and Nifty lingering below their neutral lines, as traders were cautious and remained reluctant to make significant moves going into the end of the year. Sentiments remained pessimistic, as Shashanka Bhide, one of the three external members of the Monetary Policy Committee (MPC), flagged a weak consumption demand as a key vulnerability for growth in the second half of the current fiscal as well as the next financial year. Adding more worries among traders, the Reserve Bank of India (RBI) in its Financial Stability Report (FSR) has said that the global economy faces multiple challenges, including prospects of slowing growth, large public debt, increasing economic fragmentation, and prolonging geopolitical conflicts.

On the global front, European markets were trading higher, after Spain's retail sales continued to expand in November. The data released by the statistical office INE showed that retail sales grew 5.2 percent on a yearly basis in November, slightly slower than the 5.3 percent increase in the previous month. Asian markets were trading mostly in green, as Singapore's producer prices declined for the tenth successive month in November, largely driven by a sharp fall in the oil index. The data from the Department of Statistics showed that the manufacturing producer price index fell at a stable rate of 4.5 percent year-on-year in November. The oil index plunged 7.8 percent annually in November, and the non-oil index showed a decrease of 3.9 percent.

The BSE Sensex is currently trading at 72146.08, down by 264.30 points or 0.37% after trading in a range of 72084.76 and 72417.01. There were 11 stocks advancing against 18 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.46%, while Small cap index was up by 0.51%.

The top gaining sectoral indices on the BSE were Telecom up by 2.47%, Auto up by 1.00%, FMCG up by 0.63%, Consumer Disc up by 0.54% and Capital Goods up by 0.38%, while Oil & Gas down by 1.28%, Energy down by 1.10%, Bankex down by 0.87%, PSU down by 0.81% and  IT down by 0.60% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.56%, Tata Steel up by 1.12%, Hindustan Unilever up by 0.84%, Bajaj Finance up by 0.60% and Nestle up by 0.57%. On the flip side, SBI down by 1.70%, Infosys down by 1.32%, Titan Co down by 1.28%, Tech Mahindra down by 1.26% and Indusind Bank down by 1.24% were the top losers.

Meanwhile, Commerce and Industry Minister Piyush Goyal has said that the government has decided to extend export benefits under the scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) for e-commerce exports through post or couriers. He said that sectors which can benefit from the move include gem and jewellery, handloom, handicraft, AYUSH products, pharma, leather and textiles. He said ‘collectively, we believe that anywhere between $1-2 billion of annual exports from MSMEs will get the benefit through this initiative’. The announcement assumes significance as e-commerce is the emerging route for exports, and worldwide it is expected to touch $2 trillion by 2030.

The scheme for 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 commerce ministry's arm DGFT (Directorate General of Foreign Trade) will put in place the necessary IT framework and other enablers for extension of the scheme for the exporters soon.

The RoDTEP scheme operates under a budgetary framework and for 2023-24, a budget of Rs 15,070 crore is available for it. Till December, about Rs 12,000 crore of the allocation for the year has been spent. In FY23, the scheme supported $450 billion worth of exports at the cost of Rs 13,020 crore. While in 2021-22, the scheme aided $421 billion in exports and cost Rs 12,100 crore. The rate of tax refund under the scheme ranges from 0.5 per cent to 4.3 per cent of the value of the product. It covers business-to-business exports of 10,610 products. The same products exported through e-commerce or courier will get the RoDTEP benefit.

The CNX Nifty is currently trading at 21677.30, down by 101.40 points or 0.47% after trading in a range of 21676.90 and 21770.30. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Tata Consumer Products up by 3.60%, Tata Motors up by 3.52%, Tata Steel up by 1.05%, Hindustan Unilever up by 0.80% and Adani Enterprises up by 0.79%. On the flip side, BPCL down by 3.50%, ONGC down by 1.78%, SBI down by 1.78%, Cipla down by 1.39% and Titan Co down by 1.37% were the top losers.

Asian markets were trading mostly in green; Straits Times rose 26.9 points or 0.83% to 3,241.30, Taiwan Weighted added 20.44 points or 0.11% to 17,930.81, Shanghai Composite strengthened 20.23 points or 0.68% to 2,974.93 and Hang Seng advanced 3.86 points or 0.02% to 17,047.39, while Jakarta Composite plunged 24.27 points or 0.33% to 7,279.62 and Nikkei 225 slipped 75.45 points or 0.23% to 33,464.17.

European markets were trading higher; UK’s FTSE 100 increased 9.96 points or 0.13% to 7,732.70, France’s CAC increased 28.08 points or 0.37% to 7,563.24 and Germany’s DAX gained 37.52 points or 0.22% to 16,739.07.