Bourses gain traction

Erasing all of their losses, Indian equity bourses gained traction in late afternoon session, amid firm cues from European markets. Sentiments turned positive, amid reports that the Reserve Bank of India is expected to go for a further rate cut in the next month's monetary policy review as inflation is expected to pan out in line with the central bank's projection. Traders took some support with Commerce and Industry Minister Piyush Goyal’s statement that the government will soon come out with guidelines on extending foreign exchange credit to exporters at affordable rates.

On the global front, European markets were trading in green, as Spain's consumer price inflation eased to the lowest in three years in August. The final data from the statistical office INE showed that the consumer price index rose 0.3 percent year-on-year following a 0.5 percent increase in the previous month. The rate matched the estimate published on August 29. Asian markets were also trading in green.

Back home, airlines stocks were in watch, as credit rating agency ICRA in its latest report said that the domestic passenger traffic growth during first four months of the current fiscal year (April to July) witnessed year-on-year growth of a mere 1.6 per cent primarily due to end of the tourist season.

The BSE Sensex is currently trading at 37275.82, up by 171.54 points or 0.46% after trading in a range of 37000.09 and 37291.26. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.21%, while Small cap index was up by 0.65%.

The top gaining sectoral indices on the BSE were Realty up by 2.62%, Oil & Gas up by 1.90%, Consumer Durables up by 1.47%, PSU up by 1.34% and Energy up by 1.14%, while Telecom down by 0.89% and Healthcare down by 0.49% were the only losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.73%, Bajaj Finance up by 1.53%, Mahindra & Mahindra up by 1.51%, Tata Motors - DVR up by 1.37% and Kotak Mahindra Bank up by 1.32%. On the flip side, Bharti Airtel down by 1.60%, Sun Pharma down by 0.87%, HDFC down by 0.60%, HDFC Bank down by 0.58% and Yes Bank down by 0.44% were the top losers.

Meanwhile, with an aim to increase credit supply to the crisis-ridden shadow banking sector, the Reserve bank of India (RBI) has increased loan exposure limit of banks to a single non-banking financial company (NBFC) (excluding gold loan companies) from 15 per cent to 20 per cent of its capital base.

The Reserve bank of India also noted that bank finance to NBFCs predominantly engaged in lending against gold will continue to be governed by limits prescribed in circular.

According to the extant 'Large Exposures Framework (LEF)', banks' exposure to a single NBFC is restricted to 15 per cent of their available eligible capital base, while general single counter-party exposure limit is 20 per cent, which can be extended to 25 per cent by banks' boards under exceptional circumstances.

The CNX Nifty is currently trading at 11036.75, up by 53.95 points or 0.49% after trading in a range of 10945.75 and 11042.05. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were BPCL up by 5.77%, Indian Oil Corporation up by 3.74%, Titan up by 2.93%, ICICI Bank up by 1.81% and ONGC up by 1.71%. On the flip side, Bharti Airtel down by 1.63%, Dr. Reddy’s Lab down by 1.44%, Sun Pharma down by 0.96%, Grasim Industries down by 0.93% and Indiabulls Housing Finance down by 0.68% were the top losers.

All Asian markets were trading in green; Nikkei 225 surged 228.68 points or 1.05% to 21,988.29, Straits Times advanced 17.05 points or 0.53% to 3,212.01, Jakarta Composite soared 1.46 points or 0.02% to 6,343.63 and Hang Seng was up by167.87 points or 0.62% to 27,255.50. 

European markets were trading mostly in green; DAX rose 23.41 points or 0.19% to 12,433.66 and CAC was up by 10.18 points or 0.18% to 5,653.04, while FTSE was down by 21.70 points or 0.30% to 7,322.97.