Markets continue to trade in red in afternoon session

Indian equity benchmarks continued trading in red in afternoon session as investors opted to remain on sidelines ahead of the Federal Reserve Open Market Committee (FOMC) meeting, which is set to start today. Selling was witnessed in rate sensitive stocks such as banks and realty as investors remained cautious in wake of disappointing WPI inflation numbers for August released yesterday. Further, fall in rupee value against the dollar also added to the pessimistic sentiments. However, market pared some early losses on the back of buying in auto, metal and MNC stocks. On stock specific movement, Sesa Goa, Wipro and Dr Reddys Lab were trading up by over 2.5 percent; while, NTPC and Sun Pharma were trading over 2 percent lower on BSE. Shares of gold finance companies such as Manappuram Finance and Muthoot Finance were trading lower by around 10% on BSE after the Reserve Bank of India (RBI) tightened regulations governing non-banking finance companies (NBFCs) lending against gold jewellery. Meanwhile, the market breadth remained negative, out of 1,906 stocks traded, 763 stocks advanced, while 1037 stocks declined on the BSE. On global front, Asian equity indices were trading mixed with Chinese and Hong Kong shares fell.

The BSE Sensex is currently trading at 19,718.69 down by 23.78 points or 0.12% after trading in a range of 19,779.26 and 19,635.44. There were only 12 stocks advancing against 18 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.44%, while Small cap index declined 0.32%.

The top gaining sectoral indices on the BSE were, IT up by 1.24%, Teck up by 1.01%, Metal up by 0.91%, and Auto up by 0.54%. While, Power down by 1.96%, Consumer Durable down by 0.90%, PSU down by 0.86% and Bankex down by 0.84% were the losing indices on BSE.

The top gainers on the Sensex were, Sesa Goa up by 3.89%, Wipro up by 3.34%, Dr. Reddy,s Lab up by 2.74%, TCS up by 1.39% and Coal India up by 1.23%. On the flip side, NTPC down by 2.73%, Sun Pharma down by 2.16%, HDFC down by 1.54%, Tata Power down by 1.44% and Hero Moto Corp down by 1.36% were the only losers on the Sensex.

Meanwhile, in a move to boost the country’s gems and jewellery exports, the finance ministry hiked the duty drawback rate on gems and jewellery by nearly 31 percent to Rs 227.20 per gram of net gold content, against Rs 173.20 in June. The incentive scheme now stands over 100 per cent higher than Rs 100.70 in 2012-13.

Duty drawback is the reimbursement of excise and customs duty and service tax on the imported inputs used in the manufacture of exported goods and the recent step will also provide relief to the jewellers by neutralizing the effect of increase in import duty on gold and silver. In order to contain rising gold imports, the government has recently raised import duty on gold to 10 per cent from 8 per cent set earlier. Further, import duty on silver was also raised to 10 percent from 6 per cent.

Indian total exports grew by nearly 13 per cent in August, but gems and jewellery exports still reflect negative numbers for the current fiscal. Meanwhile, the Federation of Indian Exporters (FIEO) expects that with the revision in drawback rates, annual exports of this sector will also register a positive growth in coming future.

The CNX Nifty is currently trading at 5,829.70 down by 10.85 points or 0.19% after trading in a range of 5,846.40 and 5,804.90. There were 19 stocks advancing against 31 declines on the index.

The top gainers of the Nifty were Sesa Goa up by 4.18%, Ranbaxy up by 3.36%, HCL Tech up by 3.19%, DR. Reddys Lab up by 2.71% and Grasim up by 2.65%. On the flip side, Power Grid down by 3.46%, Bank of Baroda down by 3.43%, Axis Bank down by 3.05%, NTPC down by 2.87% and Indusind Bank down by 2.85% were the major losers on the index.

Most of the Asian equity indices were trading in red; Seoul Composite down by 0.39%, Taiwan Weighted down by 0.07%, Shanghai Composite down by 1.23%, Hang Seng down by 0.33%, Nikkei 225 was down by 0.65% and Jakarta Composite down by 0.61%. While, KLSE Composite up by 0.02% and Straits Times up by 0.05%.