Markets trade in fine fettle in late morning deals

Domestic equity indices added more points and were trading higher by over 0.75% in late morning deals as market participants indulged in enlarging their positions. Meanwhile, broader indices outperformed their large peers with BSE Mid cap index and Small cap index gaining in the range of 1.45-1.75%. Hectic buying in Bajaj Finance, Bharti Airtel, Tata Motors, Axis Bank and SBI companies’ stocks helped the markets to magnify their gains. Sentiments got boost after the Reserve Bank of India (RBI) changed the policy stance to 'Neutral' from 'Withdrawal of Accomodation'. It also kept its key repo rate unchanged at 6.5 per cent for a tenth straight policy. Almost all the sectoral indices on BSE were trading into positive territory; however stocks from FMCG counter were the only exception. Stocks from Realty, Power, Industrials, Capital Goods and Consumer Disc counters were the prominent gainers of the session.

On the global front, Asian markets were trading mostly in green following positive cues from the US markets overnight. Back home, SpiceJet share price soared for a second consecutive session after the airline company said that it had settled disputes with its lessors, Horizon Aviation 1 Ltd., Horizon II Aviation 3 Ltd., and Horizon III Aviation 2 Ltd under the management of Babcock & Brown Aircraft Management (BBAM).

The BSE Sensex is currently trading at 82270.88, up by 636.07 points or 0.78% after trading in a range of 81692.46 and 82319.21. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.48%, while Small cap index up by 1.74%.

The top gaining sectoral indices on the BSE were Realty up by 2.56%, Power up by 2.32%, Industrials up by 1.94%, Capital Goods up by 1.91% and Consumer Disc up by 1.66%, while FMCG down by 0.42% was the only losing index on BSE.

The top gainers on the Sensex were Bajaj Finance up by 2.72%, Bharti Airtel up by 2.68%, Tata Motors up by 2.63%, Axis Bank up by 2.53% and SBI up by 2.33%. On the flip side, Nestle down by 2.41%, ITC down by 1.20%, Hindustan Unilever down by 0.55%, Reliance Industries down by 0.17% and HDFC Bank down by 0.10% were the top losers.

Meanwhile, Ratings agency ICRA in its latest report has said that around 1.1 million medium and heavy commercial vehicles (M&HCVs), older than 15 years as of March 31 this year, offer a significant potential for scrappage. While the actual scrappage could possibly be lower given the nature of usage of such vehicles, even if a proportion of these vehicles gets scrapped, it can support vehicle sales to some extent by spurring replacement demand. 

The Voluntary Vehicle Fleet Modernisation Programme or the Scrappage Policy, announced in March 2021, is being implemented in phases, with effect from April 1 last year. While the first phase of the policy proposed to mandatorily scrap government vehicles older than 15 years, the second phase, which started on June 1 this year, mandates scrapping on the basis of fitness of the vehicle rather than age, and as such, is more voluntary in nature. 

ICRA also projects an additional around 5.7 lakh vehicles to cross the 15-year age threshold by March 2027, along with over 9 lakh government vehicles proposed to be mandatorily scrapped under the first phase, and thus it offers a significant replacement demand potential for the automotive industry. Scrappage potential in other segments is limited, considering the limited usage of two-wheelers, passenger vehicles and light commercial vehicles (LCVs) beyond 15 years.

However, the report stated that as of August 31, 2024, the registered vehicle scrapping facilities (RVSFs) had received only 44,803 private scrap applications and 41,432 government scrap applications (including defence/impound scrap applications). The Vehicle Scrappage Policy has the potential to drive multiple benefits over the long term. While it will aid in reducing air pollution as older polluting vehicles get scrapped, it will also drive fleet modernisation programmes, in turn, supporting the auto industry volumes. It also expects a considerable reduction in scrap imports and raw material costs for automotive original equipment manufacturers (OEMs) through recycling of metals under the Scrappage Policy framework.

The CNX Nifty is currently trading at 25212.45, up by 199.30 points or 0.80% after trading in a range of 25031.35 and 25234.05. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Shriram Finance up by 3.18%, Bharti Airtel up by 2.79%, Bajaj Finance up by 2.77%, Tata Motors up by 2.66% and Axis Bank up by 2.55%. On the flip side, Nestle down by 2.40%, ITC down by 1.18%, Britannia Inds down by 1.09%, ONGC down by 0.72% and Hindustan Unilever down by 0.64% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 169.75 points or 0.81% to 21,096.54, Straits Times rose 21.78 points or 0.61% to 3,597.47, Nikkei 225 surged 340.42 points or 0.87% to 39,277.96 and Taiwan Weighted added 47.69 points or 0.21% to 22,659.08. However, Jakarta Composite plunged 9.94 points or 0.13% to 7,547.20, Shanghai Composite weakened 125.35 points or 3.59% to 3,364.43 and KOSPI dropped 0.00 points or 0% to 2,594.36.