Markets see sharp rise in late afternoon session

Indian equity markets saw sharp rise in late afternoon deals and were trading near their day’s high points, tracking firm European markets. The street remained positive, as the Reserve Bank of India (RBI) announced two key measures to help non-bank financial companies (NBFCs) which are facing a severe liquidity squeeze. The first is harmonisation of single counterparty exposure limit for banks' exposure to single NBFCs with the general single counterparty exposure limit. The central bank has decided to raise a bank's exposure limit to a single NBFC to 20 per cent of tier-I capital of the bank. The second initiative deals with credit to the priority sector.

On the global front, European markets were trading in green, as Finland's trade balance registered a surplus in June versus a deficit a year ago. The data from the Finnish Customs showed that trade balance showed a surplus of EUR 195 million in June versus a EUR 175 million deficit in the same month last year. In May, surplus was EUR 25 million. Asian markets were also trading in green. Back home, auto stocks were in focus, amid reports that India's auto industry demanded tax cuts and easier access to finance for dealers and buyers at a meeting with Indian government officials to discuss the sector's woes, in an effort to revive sales that have slumped.

The BSE Sensex is currently trading at 37195.21, up by 504.71 points or 1.38% after trading in a range of 36655.41 and 37260.57. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.09%, while Small cap index was up by 0.19%.

The top gaining sectoral indices on the BSE were Energy up by 2.36%, IT up by 2.32%, TECK up by 2.20%, Telecom up by 1.61% and Auto up by 1.44%, while Basic Materials down by 0.26% and Consumer Durables down by 0.12% were the only losing indices on BSE.

The top gainers on the Sensex were HCL Tech. up by 6.47%, Tata Motors - DVR up by 4.45%, Tata Motors up by 3.24%, Reliance Industries up by 3.00% and TCS up by 2.87%. On the flip side, Tata Steel down by 4.26%, Indusind Bank down by 1.81%, Axis Bank down by 1.52%, Larsen & Toubro down by 0.43% and Asian Paints down by 0.24% were the top losers.

Meanwhile, welcoming the Reserve Bank of India’s (RBI) decision to reduce the policy repo rate by 35 basis points from 5.75% cent to 5.40%, Engineering Export Promotion Council (EEPC) India chairman, Ravi Sehgal has said that the central bank should ensure easy credit disbursal to exporters, especially in the MSME sector, and real transmission by the banks of the earlier reductions in the lending rates.

Sehgal noted that exporters need to be supported in terms of easy credit disbursals without procedural bottlenecks, requiring cumbersome documentation, as they are facing global headwinds and slowdown in several key markets.

EEPC chairman also expressed a need to strengthen the ombudsman mechanism by RBI, for redressal of grievances and difficulties faced by exporters so that they are empowered to scale up their competitiveness. Besides, he said that India's merchandise exports with a major stake of the MSMEs dropped by over 9% in June, making a strong support by RBI and the government imperative.

The CNX Nifty is currently trading at 10986.20, up by 130.70 points or 1.20% after trading in a range of 10842.95 and 11009.70. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 6.38%, Tata Motors up by 3.28%, JSW Steel up by 2.97%, Reliance Industries up by 2.88% and TCS up by 2.77%. On the flip side, Tata Steel down by 4.46%, Cipla down by 3.34%, Ultratech Cement down by 2.94%, Indusind Bank down by 1.68% and Indiabulls Housing Finance down by 1.49% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 188.88 points or 0.73% to 26,185.91, Taiwan Weighted strengthened 108.31 points or 1.04% to 10,494.49, Nikkei 225 surged 76.79 points or 0.37% to 20,593.35, Jakarta Composite soared 58.19 points or 0.94% to 6,262.39, Shanghai Composite gained 27.49 points or 0.99% to 2,796.17 and KOSPI was up by10.90 points or 0.57% to 1,920.61. On the flip side, Straits Times was down by 13.51 points or 0.42% to 3,171.18.

All European markets were trading in green; FTSE gained 9.44 points or 0.13% to 7,208.14, CAC rose 57.56 points or 1.09% to 5,324.07 and DAX was up by 88.48 points or 0.76% to 11,738.63.