Selling pressure continues in Indian markets

A selling pressure continued in Indian equity markets during early afternoon deals, with both Sensex and Nifty falling sharply, amid heavy selling at Banking and Realty counters along with negative cues from other Asian markets. Surging oil prices amid escalating tensions in the Middle East and investor anxiety ahead of the general election results, due next week also weighed on markets. Traders took a note of reports that Finance Minister Nirmala Sitharaman hinted at the possibility of the government reconsidering changes made to the income tax rules mandating payments to micro, small and medium enterprises (MSMEs) within 45 days, failing which companies will have to pay tax on the amount due. This mandate came into effect on April 1, 2024.

On the global front, Asian markets were trading mostly in red, even as the International Monetary Fund upgraded China's growth outlook for both 2024 and 2025 citing strong first quarter GDP data and recent policy measures. The Washington-based lender expects the economy to grow 5 percent this year, which was up from 4.6 percent projected in April. Likewise, the outlook for 2025 was lifted to 4.5 percent from 4.1 percent. However, over the medium-term, growth is seen decelerating to 3.3 percent by 2029 due to aging and slower productivity growth.

The BSE Sensex is currently trading at 74605.21, down by 565.24 points or 0.75% after trading in a range of 74539.56 and 74986.22. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell by 0.27%, while Small cap index was up by 0.19%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.36%, Telecom up by 0.30%, Metal up by 0.21%, Healthcare up by 0.17% and Utilities up by 0.13%, while Bankex down by 1.10%, Realty down by 0.85%, Oil & Gas down by 0.81%, Energy down by 0.73% and IT down by 0.73% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.33%, Nestle up by 1.06%, Sun Pharma up by 1.00%, ITC up by 0.13% and Bharti Airtel up by 0.08%. On the flip side, ICICI Bank down by 2.00%, Tech Mahindra down by 1.97%, Ultratech Cement down by 1.77%, Bajaj Finserv down by 1.54% and HDFC Bank down by 1.50% were the top losers.

Meanwhile, the Directorate General of Foreign Trade (DGFT) has put on hold the new norms for permissible wastage amount for gold, silver and platinum content in jewellery exports until July 31, 2024, just a day after the notification after the gems and jewellery industry raised serious concerns on the new standards. On May 27, the DGFT has notified revised norms related to the permissible amount of wastage and standard input output with regard to the export of gold and silver jewellery. The industry claimed that the norms were notified without any consultation.  

The DGFT has said that now keeping in view the representation of the Gem and Jewellery Export Promotion Council (GJEPC) highlighting the difficulties to their sector from the revised norms, another opportunity will be given to the industry for submission of their views. It said that the industry and the council can provide information/data to the concerned norms committee within one month. Accordingly, DGFT hereby places the Public Notice dated May 27, 2024 in abeyance up to July 31, 2024 with immediate effect. 

The May 27 notice has stated that the weight of mountings and findings (or parts) of gold or silver if imported and used in export products, will not be included in determining the net content of gold and silver in export products. Under the revised norms, the permissible wastage by weight for plain gold and platinum jewellery was reduced from 2.5 per cent to 0.5 per cent. Similarly, for studded jewellery, the wastage limit was reduced from 5 per cent to 0.75 per cent. The norms for wastage for medals and coins were cut down from 0.2 per cent to 0.1 per cent. After this May 28 notice, the changes are now kept on hold.

The CNX Nifty is currently trading at 22729.60, down by 158.55 points or 0.69% after trading in a range of 22705.60 and 22825.50. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.13%, Power Grid up by 1.33%, Adani Enterprises up by 1.23%, Adani Ports & SEZ up by 1.01% and Sun Pharma up by 0.95%. On the flip side, SBI Life Insurance down by 2.85%, HDFC Life Insurance down by 2.19%, ICICI Bank down by 2.01%, Tech Mahindra down by 1.82% and Ultratech Cement down by 1.79% were the top losers.

All Asian markets were trading lower; Hang Seng declined 295.02 points or 1.57% to 18,526.14, Jakarta Composite plunged 109.46 points or 1.51% to 7,144.17, Shanghai Composite weakened 1.89 points or 0.06% to 3,107.68, Straits Times fell 1.09 points or 0.03% to 3,329.00, KOSPI dropped 45.55 points or 1.7% to 2,677.30, Nikkei 225 slipped 298.5 points or 0.77% to 38,556.87 and Taiwan Weighted lost 195.91 points or 0.9% to 21,662.50.