Domestic equity indices add more points in late morning deals

Domestic equity indices added more points in late morning deals on account of buying by funds and retail investors. Meanwhile, the session was also jubilant for broader indices with BSE Mid cap index and Small cap index gaining in the range of 0.50-0.85%. Hectic buying in Larsen & Toubro, Tata Motors, Axis Bank, SBI and Indusind Bank helped the markets to add more points. Positive cues from the other Asian markets supported domestic sentiments. Sentiments got boost as private report said that India's fiscal and monetary policies are now focusing more on supporting economic growth, aligning with expectations of a cyclical recovery. The report highlighted that the Union Budget has maintained the path of fiscal consolidation, though at a slightly faster pace than anticipated. On the BSE sectoral front, traders were seen pilling up positions in Capital Goods, PSU, Industrials, Oil & Gas and Energy, while selling was witnessed in Consumer Disc, FMCG and Consumer Durables. 

On the global front, Asian markets were trading mostly in green after U.S. President Donald Trump paused tariffs on Mexico for a month, while Canada also said the U.S. president had put on hold proposed tariffs on its exports. Back home, NLC India surged after NLC India reported strong Q3FY25 results.

The BSE Sensex is currently trading at 77781.55, up by 594.81 points or 0.77% after trading in a range of 77402.37 and 77951.81. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.81%, while Small cap index up by 0.54%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.54%, PSU up by 1.76%, Industrials up by 1.74%, Oil & Gas up by 1.65% and Energy up by 1.48%, while Consumer Disc down by 0.18%, FMCG down by 0.14% and Consumer Durables down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 3.43%, Tata Motors up by 3.13%, Axis Bank up by 2.17%, SBI up by 1.84% and Indusind Bank up by 1.81%. On the flip side, Zomato down by 2.71%, Bajaj Finserv down by 0.94%, Titan down by 0.81%, Mahindra & Mahindra down by 0.78% and Nestle down by 0.77% were the top losers.

Meanwhile, the State Bank of India (SBI) in its latest report has said that the Reserve Bank of India (RBI) may start using the Cash Reserve Ratio (CRR) more as a regulatory intervention tool rather than just a liquidity management tool in the future. It highlighted the urgent need for the central bank to revisit its existing liquidity management framework.

Currently, the RBI uses various measures to manage liquidity in the banking system, such as Open Market Operations (OMO), CRR, and the repo rate. However, it suggested that the CRR should be seen as a countercyclical liquidity buffer rather than a liquidity adjustment tool. This means the central bank could use CRR to control liquidity in the economy depending on the financial situation, rather than adjusting it frequently to manage day-to-day liquidity needs. 

It also suggested that the RBI should replace the Weighted Average Call Rate (WACR) as the main policy rate. WACR is the interest rate at which banks borrow and lend money in the overnight market. It said that WACR does not fully serve its purpose as a policy tool and should be reviewed. According to the report, the ownership of government securities (G-Secs) is expected to remain unchanged in FY26. However, there could still be an OMO gap of around Rs 1.7 trillion. This indicates that the RBI might need to introduce more liquidity measures on a sustained basis to ensure smooth functioning of the banking system.

The CNX Nifty is currently trading at 23540.75, up by 179.70 points or 0.77% after trading in a range of 23423.15 and 23582.00. There were 32 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 3.34%, Tata Motors up by 3.11%, Bharat Electronics up by 3.06%, Hindalco up by 2.62% and ONGC up by 2.33%. On the flip side, Trent down by 6.31%, Britannia Inds down by 1.21%, Hero MotoCorp down by 1.20%, Bajaj Finserv down by 0.89% and Bajaj Finance down by 0.82% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 340.96 points or 1.69% to 20,558.22, Jakarta Composite gained 68.15 points or 0.96% to 7,098.21, KOSPI increased 26.29 points or 1.07% to 2,480.24, Nikkei 225 surged 322.57 points or 0.84% to 38,842.66 and Taiwan Weighted added 71.56 points or 0.32% to 22,766.27. However, Straits Times fell 6.39 points or 0.17% to 3,820.08.