Indian markets remain firm despite higher WPI Inflation

Indian equity benchmarks remained firm during early afternoon deals, with both Sensex and Nifty trading higher, aided by positive cues from other Asian markets along with buying at almost all sectors except Healthcare. Domestic sentiments remained optimistic, amid a private report stating that over 514 million employment was generated between 2014 and 2024 out of which 197.9 million was as a result of governance-led interventions and 316.1 million due to credit-led interventions.

However, upside remained capped, after Inflation based on wholesale price index (WPI) accelerated in the month of April 2024 to 1.26% from 0.53% in March 2024, due to increase in prices of food articles, crude petroleum & natural gas, manufacture of food products, other manufacturing etc. The Component wise, primary articles index, having weight of 22.62%, increased 1.97% to 186.7 (provisional) in April 2024 from 183.1 (provisional) for the month of March 2024, on the back of rise in prices of crude petroleum & natural gas and food articles.

On the global front, Asian markets were trading mostly in green, even after producer prices in Japan were up 0.3 percent on month in April, accelerating from 0.2 percent in March. On a yearly basis, producer prices rose 0.9 percent - unchanged from the previous month following an upward revision from 0.8 percent. Export prices were up 0.4 percent on month and 1.3 percent on year, the bank said, while import prices fell 0.1 percent on month and 4.3 percent on year.

The BSE Sensex is currently trading at 73007.59, up by 231.46 points or 0.32% after trading in a range of 72683.99 and 73059.39. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.85%, while Small cap index was up by 1.48%.

The top gaining sectoral indices on the BSE were Utilities up by 2.25%, Telecom up by 1.97%, Metal up by 1.93%, Power up by 1.90% and Industrials up by 1.72%, while Healthcare down by 0.09% was the only losing index on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.56%, JSW Steel up by 2.35%, Larsen & Toubro up by 1.46%, Titan up by 1.36% and NTPC up by 1.28%. On the flip side, Axis Bank down by 1.17%, Nestle down by 0.94%, TCS down by 0.79%, ICICI Bank down by 0.55% and Bajaj Finance down by 0.46% were the top losers.

Meanwhile, the government is working on a verification system to help exporters deal with countervailing duty cases on domestic products over the Remission of Duties and Taxes on Exported Products (RODTEP) scheme. The exercise is important as countervailing or anti-subsidy duties were imposed on certain domestic units by the US and European Union (EU). 

The products which were investigated by these countries involved reimbursement of levies like electricity duty, VAT on fuel or APMC taxes under the Scheme for RoDTEP. The scheme is a World Trade Organisation (WTO) compliant measure. The duties have been imposed on certain units only and that too because they could not produce the right documents to the investigation authorities. The commerce ministry is helping Indian exporters to keep proper documentation to deal with these cases. Besides checking the documents of units, investigation authorities also look at the official verification mechanism to ascertain whether the government is randomly checking the incidence of duties or not. 

Before imposing countervailing or anti-subsidy duty (CVD), a country carries out detailed investigations on products which it believes that its trading partner is subsidising for export purposes. Subsidising exports is a kind of unfair trade practice. Countervailing duties can only be imposed if the investigating agency of the importing country determines that the imports of the product in question are subsidized and are injuring a domestic industry.

The CNX Nifty is currently trading at 22195.00, up by 90.95 points or 0.41% after trading in a range of 22081.25 and 22202.15. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 4.95%, Mahindra & Mahindra up by 3.78%, Hero MotoCorp up by 2.64%, Adani Ports & SEZ up by 2.43% and JSW Steel up by 2.32%. On the flip side, Cipla down by 2.80%, Axis Bank down by 1.05%, Nestle down by 0.99%, Britannia down by 0.95% and TCS down by 0.76% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 8.74 points or 0.05% to 19,123.80, Straits Times rose 2.88 points or 0.09% to 3,306.54, KOSPI increased 3.13 points or 0.11% to 2,730.34, Nikkei 225 surged 176.6 points or 0.46% to 38,356.06 and Taiwan Weighted added 128.14 points or 0.61% to 20,985.85, while Jakarta Composite plunged 5.52 points or 0.08% to 7,093.74 and Shanghai Composite weakened 2.62 points or 0.08% to 3,145.40.