Markets continue to trade in red in late morning deals

Indian equity markets continued to trade in red in late morning deals on account of selling by funds and retail investors. Hectic selling in Power Grid, Tata Motors, ICICI Bank, Axis Bank and HDFC Bank dragged the markets to trade lower. Meanwhile, broader indices were also trading in red with the BSE Mid cap index and Small cap index falling in the range of 0.15-0.35%. Traders were cautious after US President-elect Donald Trump has reiterated his intention to impose reciprocal tariffs in retaliation for the high tariff imposed by India on import of certain American products. Trump also said that India and Brazil were among countries that impose high tariffs on certain US products. Meanwhile, investors awaited the Federal Reserve's interest-rate decision for directional cues. On the BSE sectoral front, traders were seen pilling up positions in Healthcare, FMCG and IT, while selling was witnessed in Power, Utilities, PSU, Capital Goods and Bankex. 

On the global front, Asian markets were trading mixed as investors assessed trade data out of Japan. The country’s exports grew 3.8% in November year-on-year, beating expectations of a 2.8% increase by street. Meanwhile, imports fell by 3.8%, coming in far below expectations of a 1% expansion. The numbers put Japan’s trade balance at a deficit of 117.6 billion yen ($765.2 million), higher than expectations for a deficit of 688.9 billion yen. Back home, in the stock specific development, Sanghi Industries fell after the company on December 17, announced that the Board of Directors has approved the Scheme of Arrangement between Sanghi Industries (Transferor Company) and Ambuja Cements (Transferee Company) and their respective shareholders.  

The BSE Sensex is currently trading at 80343.91, down by 340.54 points or 0.42% after trading in a range of 80217.13 and 80868.02. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.18%, while Small cap index down by 0.31%.

The few gaining sectoral indices on the BSE were Healthcare up by 0.88%, FMCG up by 0.11% and IT up by 0.10%, while Power down by 1.32%, Utilities down by 1.31%, PSU down by 1.11%, Capital Goods down by 1.10% and Bankex down by 1.01% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.04%, Reliance Industries up by 0.83%, HCL Technologies up by 0.71%, Tech Mahindra up by 0.69% and Asian Paints up by 0.52%. On the flip side, Power Grid down by 2.12%, Tata Motors down by 1.72%, ICICI Bank down by 1.34%, Axis Bank down by 1.10% and HDFC Bank down by 1.08% were the top losers.

Meanwhile, the Global Trade Research Initiative (GTRI) has said that India's gold imports have surged alarmingly, posing a potential threat to its trade balance and economic stability, and the government should take action to address this issue. According to commerce ministry data, the country's gold imports in November 2024 reached a record high of $14.86 billion, registering a four-fold increase, mainly on account of festival and wedding demands. Gold imports stood at $3.44 billion in November 2023.

The GTRI said that the imports are driven by multiple factors, including growing investment demand, tariff reductions, and loopholes in trade agreements. This surge has raised significant economic concerns, distorting the trade balance, weakening the rupee, and widening the current account deficit. Gold imports in November accounted for 21.2 per cent of India's total merchandise imports of $70 billion. For the first time, gold surpassed crude petroleum as the country's largest single import item.

It further said this sharp increase pushed India's monthly trade deficit to its highest level, exerting pressure on the rupee, which has depreciated against the US dollar. A weaker rupee raises import costs further, worsening the current account deficit. It said that most gold enters India as bars and rods with 99.99 per cent purity, but traders are also using other tariff-free or concessional categories to bypass import duties. It noted that the country's experience with a free trade agreement with the UAE highlights the risks of offering tariff concessions on precious metals like gold, silver, and platinum in FTAs. These high-value, low-volume imports disproportionately impact India’s trade deficit and forex reserves, undermining macroeconomic stability. It added that excluding precious metals from FTAs is crucial to curb speculative imports, safeguard foreign exchange reserves, and protect India’s trade balance and economic resilience.

The CNX Nifty is currently trading at 24246.40, down by 89.60 points or 0.37% after trading in a range of 24206.15 and 24394.45. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 2.37%, Cipla up by 1.90%, Tata Consumer up by 1.09%, Eicher Motors up by 1.00% and Sun Pharma up by 0.98%. On the flip side, Bharat Electronics down by 2.16%, Power Grid down by 2.08%, Tata Motors down by 1.85%, ICICI Bank down by 1.46% and Axis Bank down by 1.16% were the top losers.

Asian markets were trading mixed; Hang Seng advanced 217.42 points or 1.09% to 19,917.90, KOSPI increased 32.88 points or 1.32% to 2,489.69, Shanghai Composite strengthened 33.64 points or 0.99% to 3,395.13 and Taiwan Weighted added 87.96 points or 0.38% to 23,105.97. However, Straits Times fell 18.91 points or 0.5% to 3,781.02, Jakarta Composite plunged 41.9 points or 0.59% to 7,115.83 and Nikkei 225 slipped 185.68 points or 0.47% to 39,179.00.