Domestic equity markets remain in red in early noon deals

Domestic equity markets remained in red in early noon session tracking a downfall in the global markets. Sentiments remained weak as U.S. Treasury yields climbed. The yield on the 10-year Treasury was up nearly 9 basis points at 3.946%. Selling in Infosys, TCS, JSW Steel and HDFC bank companies’ stocks dragged the markets to lower. Cautiousness also prevailed in the markets amid at the first weekly auction of the last quarter of 2023-24, the states saw their interest burden sharply rising to cross the 7.7 percentage mark on Tuesday, leading to the spread between the cut-off of 10-year state bonds and the G-sec yield crossing the 50 basis points mark for the first time in two years. Adani group related stocks were in focus as the Supreme Court of India leaved the probe into the Adani-Hindenburg case with the Securities and Exchange Board of India (SEBI). This was against the appeal from petitioners to transfer the case to the Central Bureau of Investigation (CBI).

On the global front, Asian markets were trading in red following mostly negative cues from US markets overnight, as major tech firms including chipmakers came under pressure after Barclays cut the iPhone maker Apple's rating to underweight and trimmed its price target. Back home, on the BSE sectoral front, traders were seen pilling up position in Utilities, Realty, Power, Oil & Gas and Telecom, while selling was witnessed in IT, Metal, TECK, Basic Materials and Auto. 

The BSE Sensex is currently trading at 71622.32, down by 270.16 points or 0.38% after trading in a range of 71442.23 and 71862.00. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.35%, while Small cap index up by 0.36%.

The top gaining sectoral indices on the BSE were Utilities up by 1.22%, Realty up by 1.04%, Power up by 0.91%, Oil & Gas up by 0.79% and Telecom up by 0.73%, while IT down by 1.80%, Metal down by 1.72%, TECK down by 1.40%, Basic Materials down by 0.46% and Auto down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 2.01%, SBI up by 1.20%, Bharti Airtel up by 1.06%, Indusind Bank up by 0.94% and Mahindra & Mahindra up by 0.65%. On the flip side, JSW Steel down by 3.22%, Infosys down by 2.22%, TCS down by 1.89%, Tech Mahindra down by 1.87% and Wipro down by 1.87% were the top losers.

Meanwhile, the government has relaxed curbs for shifting of used IT hardware goods like laptops and desktops by a company in special economic zones (SEZs) to outside these duty free-enclaves or domestic tariff areas. SEZs are treated as deemed foreign territory for customs laws and bringing goods from these zones into the domestic tariff area (DTA) or domestic market is tantamount to imports. In general, a company from DTA needs a licence for imports of these goods from SEZs.

Easing these curbs, Directorate General of Foreign Trade (DGFT) in a notification has said that used IT assets (laptops, desktops, monitors, printers) can be moved from SEZ by a company to DTA without a license for the purposes of further use in their DTA operations ‘only’. However, it said these equipment should have been used in SEZ units for two years and should not be older than five years from the date of manufacturing. Import policy of used IT assets (laptops, desktops, monitors, printers) from SEZ to DTA has been notified. It added that in cases where a unit is closing down its operations in SEZ, and relocating to the DTA, the import of these items is allowed without a licence subject to a condition that those products should not be older than five years from the date of manufacturing. If a SEZ unit has second hand/used/old condition equipment and is being used for less than two years, they can not be shifted to DTA. 

It said import of any used IT assets which do not fulfil these criteria shall be subject to licence for restricted import. It added that these relaxations will be applicable on the condition that no exemption has been availed from any regulatory requirements, that is Compulsory Registration Order (CRO), Restriction of Hazardous Substances (RoHS), and WPC (wireless planning and coordination) import licence. The development assumes significance as in October 2023, the government had tweaked curbs on imports of laptops and computers as it allowed importers to bring in shipments of IT hardware from overseas on a mere 'authorisation' upon detailing quantity and value. The new 'import management system' is aimed at monitoring shipments of laptops, tablets and computers into the country without hurting market supply or creating a cumbersome licensing regime.

The CNX Nifty is currently trading at 21582.15, down by 83.65 points or 0.39% after trading in a range of 21538.75 and 21677.00. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were ITC up by 1.97%, BPCL up by 1.19%, SBI up by 1.17%, Bharti Airtel up by 1.14% and Indusind Bank up by 0.93%. On the flip side, JSW Steel down by 3.25%, Hindalco down by 2.98%, LTIMindtree down by 2.52%, Infosys down by 2.23% and Hero MotoCorp down by 2.20% were the top losers.

All Asian markets were trading lower; Hang Seng declined 194.87 points or 1.16% to 16,593.68, Taiwan Weighted lost 294.45 points or 1.68% to 17,559.31, Straits Times fell 29.56 points or 0.92% to 3,200.39 KOSPI dropped 59.18 points or 2.22% to 2,610.63, Shanghai Composite weakened 7.7 points or 0.26% to 2,954.58 and Jakarta Composite plunged 26.01 points or 0.36% to 7,297.58.