Benchmarks pare gains after a gap up start

The Indian equity markets have made a gap up start shrugging off weak global cues as it resumed trading after a two-day holiday break. But, pared most of its early gains on the back of profit booking aimed downtrend in global equity indices ahead of US key job report. Though, the US markets lost momentum in last session breaking their four days long gaining streak while, most of the Asian counterparts were trading in the negative terrain at this point of time. Back home, the country's Exports surged by 82% to $29.3 billion year-on-year in July, notwithstanding problems in the US and Europe. On the sectoral front consumer durables witnessed the maximum gain in trade followed by oil and gas and auto while, realty, technology and capital goods remained the top losers on the BSE sectoral space. Meanwhile, the Met department has reported that, India's monsoon rains were 18 percent above normal in the week to August 31, improving from 8 percent below normal in the previous week. The broader indices were trading on a flat note at this point of time. The market breadth on the BSE was positive; there were 1,054 shares on the gaining side against 690 shares on the losing side while 92 shares remained unchanged.

The BSE Sensex opened at 16,963.67 about 287 points higher compared to its previous closing of 16,676.75, and has touched a high and a low of 16,989.86 and 16,704.71 respectively.

The index is currently trading at 16,740.02, up by 63.27 points or 0.38%. There were 18 stocks advancing against 12 declines on the index.

The overall market breadth has made a strong start with 57.41% stocks advancing against 37.58% declines. The broader indices were trading near their neutral lines; the BSE Mid cap and Small cap indices rose 0.08% and 0.05% respectively.

The top gaining sectoral indices on the BSE were, CD up by 1.84%, Oil and Gas up by 1.28%, Auto up by 1.10%, HC up by 0.97% and FMCG was up by 0.88%. While, Realty down by 1.33%, IT down by 1.16%, CG down by 0.67%, TECk down by 0.49%  and Power down by 0.16% were the top losers on the index.

The top gainers on the Sensex were Sun Pharma up by 2.59%, M&M up by 2.37%, Sterlite Industries up by 1.90%, Hero Motocorp up by 1.56% and Bharti Airtel was up by 1.52%.

On the flip side, DLF was down by 2.14%, TCS was down by 1.60%, Jaiprakash Associates was down by 1.55%, Infosys was down by 1.51% and BHEL was down by 1.40% were the top losers on the Sensex.

Meanwhile, with a view to strengthen the regulatory and supervisory structure of non-banking financial companies (NBFCs), the Reserve Bank of India's (RBI) working group headed by former RBI Deputy Governor Usha Thorat has recommended new regulations for NBFCs. The working group of RBI has recommended that 'any transfer of shareholding, direct or indirect, of 25% and above, change in control, merger or acquisition of any registered NBFC should have prior approval of the RBI.

The NBFC is a non banking institution involved in the business of receiving deposits or lending to various classes of consumers. All the NBFCs which raise funds from public are required to register with the central bank. Reliance Capital, Bajaj Finance and Shriram Transport Finance are some of the well known NBFCs.

The proposed guideline also recommended that the RBI should register only those NBFCs which have minimum asset size more than Rs 50 crore, whereas NBFCs which are not raising funds from the public may be exempted from registration only if their asset is less than Rs 1,000 crore. It also suggested that the NBFCs have to maintain certain liquidity ratios like cash, bank balance and holding of government securities fully cover the gaps, if any, between cumulative outflows and cumulative inflows for first 30 days.

The working group also recommended introducing asset classification and provisioning norms for NBFCs in phases similar to banks. It also recommended bringing in suitable income tax deduction and accounting norms similar to banks. The group also proposed to improve a host of disclosure and risk management norms for NBFCs.

The S&P CNX Nifty opened at 5,109.80; about 108 points higher compared to its previous closing of 5,001.00, and has touched a high and a low of 5,113.70 and 5,006.90 respectively.

The index is currently trading at 5,019, higher by 18.75 points or 0.37%. There were 29 stocks advancing against 21 declines on the index.

The top gainers of the Nifty were M&M up by 2.20%, Ambuja Cement up by 2.14%, Reliance up by 1.63%, Tata Motors up by 1.62% and Ranbaxy up by 1.56%.

On the flip side, HCL Tech down by 3.91%, Sesa Goa down by 2.37%, DLF down by 2.03%, IDFC down by 2.02% and Jaiprakash Associates down by 1.55%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite was down 32.74 points or 1.28% to 2,523.30, Hang Seng was down 271.34 points or 1.32% to 20,313.99, Nikkei 225 was down 120.00 points or 1.32% to 8,940.80, Straits Times was down 16.99 points or 0.59% to 2,850.19, Seoul Composite was down 10.10 points or 0.54% to 1,870.60 and Taiwan Weighted was down by 4.81 points or 0.06% to 7,752.95.

On the flip side, KLSE Composite was up by 23.38 points or 1.62% to 1,470.65.

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