Indian bourses trim early gains tracking weakness in Asian market

Indian equity indices pared initial gains to trade on a flat note, tracking weakness in the Asian markets. Selling pressure in energy, FMCG and telecom stocks weighed on the market. At 10.18 a.m., Sensex was trading at 31,632.29, higher by 43.57 or 0.14 per cent from its previous close of 31,588.72.

During the first hour of trade it surged over 460 points to touch an intra-day high of 32,056.47. It had opened at 32,056.19 and has touched an intra-day low of 31,540.06 points.

The Nifty50 on the National Stock Exchange was trading at 9,289.15, higher by 22.40 points or 0.24 per cent.

 In a move to safeguard domestic industry from any further injury during the coronavirus outbreak, the central government has extended the operation of higher import duty on a key input used by automobile and construction industry for another six months from April 15.

As per a Finance Ministry notification, the anti-dumping duty imposed on acetone imports from countries such as Chinese Taipei, Saudi Arabia and South Korea has been extended till October 14.

The anti-dumping duty, which is imposed to protect the domestic industry, was to expire on April 15, 2020. In case of acetone, the penal duty varies from $86.10 per tonne to $271.37 per tonne, depending on the origin of the export and nature of individual operations.

“This is a fair decision to help the domestic industry at a time when businesses are suffering due to Covid-19 outbreak and disruptions caused by the lockdown,” said a source in the Trade Promotion Council of India who did not wish to be named.

The TPCI had earlier sought extension of the anti-dumping duty.

Acetone is a basic organic chemical used in the manufacture of bulk pharmaceuticals, agro-chemicals, dyes, explosives, and downstream chemicals. It can be used in solvent applications and in the manufacture of chemicals for coatings, plastics, and in construction and automotive industries.

The Indian acetone market is estimated around 200,000 tonne. This demand is fuelled mainly by the downstream end-use in the pharmaceutical, paint and cosmetic industries accounting for more than 80 per cent of acetone consumption in India. There are only two major acetone suppliers − Hindustan Organic Chemicals Limited and Schenectady International Group. They meet roughly 30 per cent of the domestic need while the rest has to be imported.

With China becoming self sufficient in this chemical, bulk of global production of acetone is being dumped into India at throwaway prices.

Meanwhile, as the government on Sunday said that e-commerce platforms will be able to sell only essential goods, e-commerce majors have expressed their support to the decision, but have also said that they hope for relaxations to benefit both the customers and the sellers.

The Centre on Sunday said that it would allow e-commerce companies and the vehicles used by operators of these units to supply only essential goods subject to “necessary permission” during the lockdown and the supply of non-essential goods by e-commerce companies will remain prohibited during the 19-day lockdown ending May 3.

The market players have however, expressed their resentment against the decision and e-commerce players and their sellers had been preparing to resume services starting April 20.

An Amazon India spokesperson said the company appreciates the vision of the government, but also noted that the decision would disappoint the consumers and several small businesses and sellers.

“We appreciate and are fully committed to the vision of the government to keep the citizens healthy. The need of the hour is to ensure the safety of our citizens first, serving their needs while they stay at home,” said the spokesperson.

“The new guideline will disappoint not only the consumers whose list of essentials had expanded to work from home and study from home products but also the thousands of small businesses, sellers and manufacturers across the country, who had geared up in the last 48 hours to provide millions of people with safe access to products.”

The Amazon India spokesperson further said that on behalf of consumers and sellers, the company hopes that this situation is rectified soon so that the urgent need of consumers is met and that there is revival of economic activity.

The company added that it will continue to follow the guidance and deliver essential products and work closely with all central, state and local authorities for expedited processes to make safe deliveries of priority products possible.

Indo-Asian News Service