Sensex, Nifty trade near day’s high points

Indian equity benchmarks traded near their intraday high points in early afternoon deals, with both Sensex and Nifty holding notable gains, despite mixed cues from other Asian markets. Domestic sentiments remained optimistic as the International Monetary Fund (IMF) praised the Reserve bank of India (RBI) for tightening the monetary policy to curb inflation in the country. Besides, Finance Minister Nirmala Sitharaman said in the upcoming budget next February, growth will be among the top priorities of the government and attention will be paid to sustaining the momentum that the Indian economy has got coming out of the COVID-19 pandemic.

The street took note of S&P Global Ratings’ statement that India is facing various factors that may shake its sovereign credit metrics but strong economic growth rate and external balance sheet are expected to neutralize the risks inherent in the global environment. S&P has the lowest investment grade rating of 'BBB-' on India with a stable outlook.

On the global front, Asian markets were trading mixed, as the value of core machinery orders in Japan was down a seasonally adjusted 5.8 percent on month in August, the Cabinet Office said - standing at 909.8 billion yen. That missed expectations for a decline of 2.3 percent following the 5.3 percent gain in July. On a yearly basis, core machinery orders climbed 9.7 percent - again shy of expectations for an increase of 12.6 percent and down from 12.8 percent in the previous month.

The BSE Sensex is currently trading at 57541.55, up by 394.23 points or 0.69% after trading in a range of 57085.92 and 57575.16. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index was up by 0.22%, while Small cap index was down by 0.14%.

The top gaining sectoral indices on the BSE were FMCG up by 1.05%, PSU up by 0.87%, Auto up by 0.86%, Energy up by 0.82% and Metal up by 0.78%, while Capital Goods down by 0.23%, Consumer Durables down by 0.14% and Industrials down by 0.07% were the few losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 2.40%, Axis Bank up by 2.37%, HCL Tech. up by 2.06%, NTPC up by 1.86% and Mahindra & Mahindra up by 1.58%. On the flip side, Asian Paints down by 1.44%, Dr. Reddy's Lab down by 0.67%, ICICI Bank down by 0.62% and Maruti Suzuki down by 0.08% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has raised the minimum capital requirement for setting up an asset reconstruction company (ARC) to Rs 300 crore from the existing Rs 100 crore in order to strengthen the securitisation sector which plays a vital role in the management of distressed financial assets. The RBI, in a circular amending the existing regulatory framework for such entities, said the existing ARCs have been given a glide path to meet the minimum net owned fund (NOF) requirement till April 2026.

Consequently, it said any ARC obtaining the certificate of registration on or after the date of this circular shall not commence the business of securitisation or asset reconstruction without having minimum NOF of Rs 300 crore, adding the guidelines are effective immediately. Under the earlier guidelines, each ARC was required to frame a board-approved policy laying down the broad parameters for settlement of debts due from the borrowers. Upon review, the RBI said the guidelines for the reconstruction of financial assets through settlement of dues payable by the borrowers have been modified.

The circular further said settlement of dues with the borrower shall be done only after the proposal is examined by an Independent Advisory Committee (IAC) which shall consist of professionals having technical/ finance/ legal background. IAC, after assessing the financial position of the borrower, the time frame available for recovery of the dues, projected earnings and cash flows of the borrower and other relevant aspects, shall give its recommendations to the ARC regarding settlement of dues with the borrower. It said any management fee/ incentives charged towards the asset reconstruction or securitisation activity should come only from the recovery effected from the underlying financial assets. Also, ARCs will have to constitute an audit committee of the board comprising of non-executive directors only.

The CNX Nifty is currently trading at 17079.90, up by 96.35 points or 0.57% after trading in a range of 16960.05 and 17105.40. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 3.21%, Coal India up by 2.64%, Power Grid up by 2.42%, Axis Bank up by 2.30% and NTPC up by 1.99%. On the flip side, Adani Enterprises down by 2.75%, Asian Paints down by 1.58%, ICICI Bank down by 0.87%, Dr. Reddy's Lab down by 0.75% and Tata Steel down by 0.20% were the top losers.

Asian markets were trading mixed; Straits Times trembled 6.85 points or 0.22% to 3,098.15, Jakarta Composite lost 16.56 points or 0.24% to 6,922.59, Taiwan Weighted dropped 24.79 points or 0.19% to 13,081.24 and Nikkei 225 slipped 4.42 points or 0.02% to 26,396.83. On the flip side, KOSPI rose 10.40 points or 0.47% to 2,202.47, Shanghai Composite gained 43.12 points or 1.45% to 3,022.91 and Hang Seng increased 199.69 points or 1.19% to 17,032.05.