Benchmarks trade at the highest point of the day

Indian equity markets extended gains to continue firm trade hovering near the highest point of the day in the late afternoon session. The sentiments were on upbeat mood after Reserve Bank of India cut its key repo rate by a higher-than-expected 50 basis points to 6.75%, with inflation running at record lows and the economy in danger of slowing down. Some additional support came after Finance Minister Arun Jaitley welcomed the RBI’s decision to cut repo rate, saying it will help in the recovery of the economy. Jaitley added that the government is fully committed to meeting its fiscal deficit targets. Traders were seen piling position in Realty, Bankex and Auto stocks, while selling was witnessed in Metal and Oil & Gas sector stocks. In the scrip specific development, Shree Renuka Sugars was trading in red after its Brazilian subsidiaries Renuka Vale Do Ivai and Renuka do Brasil filed for bankruptcy.

On the global front, the Asian markets were trading mostly in red, while the European markets were trading mostly on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,900 and 25,900 levels respectively. The market breadth on BSE was positive in the ratio of 1271:1124 while 121 scrips remained unchanged.

The BSE Sensex is currently trading at 25993.04, up by 376.20 points or 1.47% after trading in a range of 25287.33 and 26005.99. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.66%, while Small cap index up by 0.23%.

The gaining sectoral indices on the BSE were Realty up by 2.50%, Bankex up by 1.82%, Auto up by 1.59%, IT up by 1.15% and Capital Goods up by 1.15%, while Metal down by 1.07% and Oil & Gas down by 0.53% were the losing indices on BSE.

The top gainers on the Sensex were HDFC up by 4.10%, Maruti Suzuki up by 3.64%, Mahindra & Mahindra up by 3.38%, SBI up by 2.13% and BHEL up by 2.10%.

On the flip side, Vedanta down by 4.33%, Tata Steel down by 2.48%, Hindalco down by 2.19%, Dr. Reddy’s Lab down by 2.19% and Bharti Airtel down by 0.95% were the top losers.

Meanwhile, Indian oil refiners will be making $700 million oil payment to Iran on September 30. This will be the first payment following Iran's landmark nuclear deal with world powers in July paved the way for easing sanctions against the country. The refiners will deposit rupee equivalent of $700 million in Kolkata-based UCO Bank which will then transmit the money to Reserve Bank of India (RBI). UCO Bank has already bought dollars in the forward markets for payments into the Central Bank of Iran`s account with Oman`s Bank Muscat.

Mangalore Refinery and Petrochemicals (MRPL) will pay $300 million in dues and Essar Oil will clear $300 million, Hindustan Petroleum Corp (HPCL) and HPCL-Mittal Energy (HMEL) will be the other refiners which will clear part of their outstanding. Last month, the US Treasury had approved the payment of $1.4 billion out of India's $6.5 billion outstanding oil payments to Iran. The timing for the second installment was not declared yet. The remaining $4 billion would be cleared in tranches after payment channels are cleared.

From February 2013, Indian refiners like Essar Oil and MRPL have been paying 45% of payment in rupees through UCO Bank, Kolkata which is due on purchase of crude oil from Iran while the remaining has been accumulating thereafter. Last fiscal, they had paid nearly $3 billion in six installments through a limited payment channel. Since then the outstanding has reached over $6.5 billion.

Earlier in 2011, when US and western powers blocked payment channels in a bid to bring Iran to the negotiating table over its controversial nuclear programme, RBI had facilitated oil payments to Iran via Turkey. Currently, the outstanding dues of Iran for crude oil purchases stand at $3.34 billion for Essar Oil, $2.49 billion for MRPL, $581 million for IOC, $97 million for HMEL and $29 million for HPCL. Besides, about Rs 17,000 crore was lying in Iranian account with UCO Bank.

The CNX Nifty is currently trading at 7911.40, up by 115.70 points or 1.48% after trading in a range of 7691.20 and 7912.10. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were HDFC up by 4.46%, IndusInd Bank up by 3.68%, Mahindra & Mahindra up by 3.60%, Maruti Suzuki up by 3.55% and Bank of Baroda up by 2.48%.

On the flip side, Vedanta down by 4.28%, BPCL down by 2.94%, Tata Steel down by 2.32%, Adani Ports &Special down by 2.18% and Hindalco down by 2.06% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 714.27 points or 4.05% to 16,930.84, Hang Seng decreased 629.72 points or 2.97% to 20,556.60, Shanghai Composite decreased 62.62 points or 2.02% to 3,038.14, Straits Times decreased 12.82 points or 0.46% to 2,779.10 and FTSE Bursa Malaysia KLCI decreased 5.57 points or 0.35% to 1,602.86.

On the other hand, Jakarta Composite increased 0.97 points or 0.02% to 4,121.47. South Korea and Taiwan markets were closed today on account of national holiday.

The European markets were trading mostly in red; UK’s FTSE 100 decreased 25.1 points or 0.42% to 5,933.76, France’s CAC decreased 7.81 points or 0.18% to 4,349.24 while, Germany’s DAX increased 7.46 points or 0.08% to 9,491.01.