Sustained selling drags Indian markets to intraday low points

A sustained selling dragged Indian equity markets to their intraday low points in early afternoon deals, with selling witnessing at almost all counters except Healthcare and IT, despite positive cues from other Asian markets. Power Grid fell the most among major industry players on the BSE, followed by Tata Motors. Traders got cautious, amid a private report stating that India’s foreign aid has dipped post-pandemic but has also become more varied than before. The average aid per annum declined to Rs 5,011 crore in the four years since FY22 as compared with Rs 5,805 crore in the four years leading up to Covid. Besides, US President-elect Donald Trump has set the stage for a potential trade conflict with India, threatening to impose reciprocal tariffs if the country continues to levy high taxes on American goods.

On the global front, Asian markets were trading mostly in green, as the Malaysian foreign trade surplus increased in November from a year ago as exports grew faster than imports. The data from the statistical office showed that the trade surplus rose to MYR 15.3 billion in November from MYR 12.1 billion in the same month last year. The surplus also rose from MYR 11.9 billion in October. Exports climbed 4.1 annually in November, driven by a 10.3 percent surge in domestic exports. On the other hand, re-exports showed a decrease of 18.7 percent.

The BSE Sensex is currently trading at 80208.36, down by 476.09 points or 0.59% after trading in a range of 80192.24 and 80868.02. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.53%, while Small cap index was down by 0.66%.

The only gaining sectoral indices on the BSE were Healthcare up by 0.71% and IT up by 0.07%, while Utilities down by 1.78%, PSU down by 1.75%, Power down by 1.68%, Capital Goods down by 1.49% and Metal down by 1.33% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 0.86%, HCL Tech up by 0.69%, Tech Mahindra up by 0.46%, Mahindra & Mahindra up by 0.26% and Reliance Industries up by 0.24%. On the flip side, Power Grid down by 2.20%, Tata Motors down by 2.12%, NTPC down by 1.66%, JSW Steel down by 1.58% and ICICI Bank down by 1.31% were the top losers.

Meanwhile, Comptroller and Auditor General (CAG) audit report has said that the commerce ministry needs to properly monitor the Export Promotion Capital Goods (EPCG) Scheme, as it not only allows duty-free imports of capital goods but also grants a long gestation period for meeting the export obligation. The scheme allows import of capital goods for pre-production, production, and post-production at nil customs duty but subject to meeting export obligations. 

The report also said the import of capital goods from ports other than the registered port without adhering to the prescribed procedure involves the risk of importing the goods from multiple ports using the same authorisation that have revenue implications and has the risk of misuse of the bonds. The customs and regional authorities should monitor such cases scrupulously and invoke penal action for non-compliance. CAG has presented the performance audit report on the scheme in Parliament. The scheme not only allows duty-free imports of capital goods but also grants a long gestation period for meeting the export obligation (EO) and therefore needs to be duly monitored by the regional authorities for successful implementation of the scheme. 

CAG said a performance audit was conducted to ascertain whether the issue, utilisation, redemption and implementation of authorisations by the Directorate General of Foreign Trade (DGFT) and the customs department is being done in an efficient and effective manner. This report contains 72 audit observations and 26 recommendations. The performance audit has revenue implication of Rs 479.81 crore. It also said the audit has observed incorrect fixation of Specific Export Obligation (SEO), fixing same Average Export Obligation (AEO) for different financial years as well as different AEOs for the same fiscal year. 

It added that the audit found that facilitation measures of the online system for processing of applications under the ease of doing business for simplifying the process of issuance of EPCG, authorisations need to be reviewed as the online system do not check the veracity of the documents submitted, but only prompts to upload the documents before submission.

The CNX Nifty is currently trading at 24200.50, down by 135.50 points or 0.56% after trading in a range of 24193.45 and 24394.45. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 2.21%, Cipla up by 1.84%, Trent up by 1.31%, Wipro up by 0.96% and Sun Pharma up by 0.90%. On the flip side, Bharat Electronics down by 2.58%, Tata Motors down by 2.26%, Power Grid down by 2.15%, JSW Steel down by 1.74% and NTPC down by 1.69% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 161.72 points or 0.82% to 19,862.20, Shanghai Composite strengthened 17.5 points or 0.52% to 3,378.99, KOSPI increased 27.62 points or 1.11% to 2,484.43 and Taiwan Weighted added 150.66 points or 0.65% to 23,168.67, while Jakarta Composite plunged 39.11 points or 0.55% to 7,118.62, Straits Times fell 16.04 points or 0.42% to 3,783.89 and Nikkei 225 slipped 282.97 points or 0.72% to 39,081.71.