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Bears hold grip over Dalal Street
Sep-06-2024

Bears were holding a tight grip over the Dalal Street in early afternoon deals, with both Sensex and Nifty falling sharply, amid mixed cues from other Asian markets along with heavy selling at Telecom and PSU counters, after U.S. private payrolls data showed the weakest growth since 2021, heightening fears of a slowing labor market. All eyes now remain on the Eurozone GDP data and the all-important U.S. jobs report due later in the day. Traders got cautious, as Minister of Road Transport and Highways Nitin Gadkari said that India, an oil guzzler with a massive fossil fuel market, will find it difficult to cut crude imports by 25 per cent. India imported 87.7 per cent of its crude oil in 2023-24. The street took a note of Union Minister of Commerce & Industry, Piyush Goyal’s statement that a genuine rational single window is key for ease of doing business in the country. He said that if all States and Union Territories (UTs) come to one platform for approvals and facilities, it would attract global investment in each state.

On the global front, Asian markets are trading mixed, after South Korea posted a current account surplus of $9.13 billion in July, down from $12.26 billion in June. The goods account saw an $8.49 billion surplus as exports increased annually by 16.7 percent to $58.63 billion and imports increased 9.4 percent to $50.14 billion. The services account posted a $2.38 billion deficit owing to deficits in the travel and in the other business services accounts.

The BSE Sensex is currently trading at 81426.42, down by 774.74 points or 0.94% after trading in a range of 81248.14 and 82254.79. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined by 0.67%, while Small cap index was down by 0.29%.

The only gaining sectoral indices on the BSE were Metal up by 0.18% and Healthcare up by 0.01%, while Telecom down by 2.45%, PSU down by 1.79%, Oil & Gas down by 1.55%, Energy down by 1.45% and Bankex down by 1.29% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 1.44%, JSW Steel up by 1.35%, Asian Paints up by 1.01%, Hindustan Unilever up by 0.51% and Tata Steel up by 0.43%. On the flip side, SBI down by 3.52%, HCL Tech. down by 2.17%, Larsen & Toubro down by 1.70%, ITC down by 1.64% and Tata Motors down by 1.56% were the top losers.

Meanwhile, Commerce and Industry Minister Piyush Goyal has mooted the idea of introduction of border adjustment tax and suggested discussions on this with the steel industry with a view to protect the domestic players by providing a level-playing field against increasing imports. He said that this tax is in compliance with the World Trade Organization (WTO). The idea assumes significance as the industry is seeking protection from imports at predatory prices. 

The minister also asked the industry to target 500 million tonnes of steel production in the next 10 years. At present, the industry is eyeing 300 million tonnes of output by 2030. He suggested the industry find newer and better ways on lowering carbon emissions and promoting high productivity and quality steel in the country. He said ‘let’s try and utilise AI (artificial intelligence) to optimise our production, reduce waste, and improve efficiency across the value chain and work towards a circle economy in a bigger way’.

The minister added that the government was not able to extend the benefits of the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme to the sector due to a shortage of funds. He said ‘on the Border Adjustment Tax, electricity duty, iron ore duties, when you are exporting steel, we are loaded with these taxes. Imported steel which comes into India doesn’t have to pay all these taxes. Border Adjustment Tax is a WTO-compliant mechanism, which if all the industries - CII, FICCI, Assocham - everyone take out, we may be in a position to get traction and get it also into the country’.

The CNX Nifty is currently trading at 24932.30, down by 212.80 points or 0.85% after trading in a range of 24859.60 and 25168.75. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were LTIMindtree up by 1.58%, Bajaj Finance up by 1.46%, JSW Steel up by 1.26%, Asian Paints up by 0.98% and Hindalco up by 0.72%. On the flip side, SBI down by 3.60%, HCL Tech. down by 2.26%, Larsen & Toubro down by 1.69%, ITC down by 1.67% and BPCL down by 1.61% were the top losers.
 
Asian markets are trading mixed; Jakarta Composite gained 50.45 points or 0.65% to 7,731.49, Straits Times rose 3.49 points or 0.1% to 3,462.15 and Taiwan Weighted added 247.48 points or 1.15% to 21,435.19, while Shanghai Composite weakened 21.01 points or 0.75% to 2,767.30, KOSPI dropped 31.22 points or 1.23% to 2,544.28 and Nikkei 225 slipped 265.62 points or 0.73% to 36,391.47.
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