Indian equities show signs of recovery post optimistic European opening

Local benchmark indices are showing great deal of enthusiasm in afternoon trades this Friday and have even gone on to pare a large part of losses amid highly volatile trades. Investors were seen covering a lot of short positions after some pessimism got petered out on the back of strong European market opening. The tentative optimism in sentiments came after the Group of 20 finance ministers and central bank Governors reassured markets that they would take all necessary measure to preserve financial stability and increase the flexibility of the euro zone's rescue fund. However, the upside chances for the local markets remain limited as Asian peers continue to trade on a somber note as benchmarks in countries like South Korea and Taiwan are trading with large cuts of  5.73% and 3.55% respectively. On the BSE sectoral space, metal, capital goods and rate sensitive counters did the maximum damage and traded with huge losses. However, information technology pocket showed some resilience and attracted buying interests since rupee depreciated considerably against the American greenback. The defensive FMCG counter along with some oil and gas stocks like ONGC and BPCL too tried hard to prevent the frontline indices from dipping deeper into the red terrain. Meanwhile, Deputy Governor Subir Gokar commenting on rupee’s recent declining run opined that the RBI will maintain its stance of intervening in the foreign exchange market only to smoothen volatility.

Moreover, the broader markets too failed to show any kind fervor and traded with large cuts of around a percent. The bourses declined on very large volumes of over around Rs 1.35 lakh core while the market breadth on BSE was in favor of declines in the ratio of 1845:702 while 86 scrips remained unchanged.

The BSE Sensex is currently trading at 16,242.30 down by 118.85 points or 0.73% after trading as high as 16,323.74 and as low as 16,052.47. There were 12 stocks advancing against 18 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap index plunged 0.98% and Small cap sank 1.38%.

On the BSE sectoral space, TECk up 0.45%, IT up 0.43% and FMCG up 0.13% were the only gainers while Metal down 2.06%, CD down 1.74%, CG down 1.66%, Bankex down 1.07% and Realty down 1.07% were the major losers on the index.

Cipla up 2.54%, NTPC up 1.27%, Wipro up 1.19%, SBI up 1.11% and Tata Power up 1.03% were the major gainers on the Sensex, while Tata Motors down by 3.42%, Hindalco down 3.37%, HDFC Bank down 3.25%, HDFC down 2.36% and Tata Steel down 2.32% were the major losers on the index.

Meanwhile, Reserve Bank of India (RBI) on September 22 in its notification tightened the return filing format for non-banking financial companies (NBFCs) under which they will have to make disclosures about their deposit and lending activities to the central bank more frequently. According to the revised format the NBFCs have to make disclosures about their deposit and lending activities to the central bank on a quarterly basis. NBFCs are also required to file various returns related to deposit acceptance, prudential norms, capital market exposure, etc.

Likewise, the RBI has also asked non deposit taking NBFCs to submit statements on capital funds, risk weighted assets, risk asset ratio, among others on quarterly basis. However, norms relating to reporting about liquid asset exposure to capital market among other have not been changed. The NBFCs which accepts deposits will have to submit quarterly returns on liquid assets to the RBI.

The NBFCs with total asset of Rs 100 crore and above will have to submit monthly returns on exposure to capital market. However, the non-deposit taking NBFCs would continue to file monthly returns on important financial parameters.

In its notification RBI said, the returns, under the new norms, concerning deposits, prudential norms for deposit taking NBFCs and statement of capital funds, risk weighted assets, risk asset ratio for non-deposit taking NBFCs should be submitted for the July-September quarter. All these filings will have to be done by NBFCs to the central bank in the revised formats notified by the apex bank, the RBI added.

The S&P CNX Nifty is currently trading at 4,888.70, lower by 34.95 points or 0.71% after trading as high as 4,914.15 and as low as 4,829.60. There were 19 stocks advancing against 21 declines on the index.

The top gainers on the Nifty were R Power up 2.22%, Cipla up 2.11%, HCL Tech up 1.42%, R Capital up 1.31% and Kotak Bank up 1.29%.

HDFC Bank down 3.66%, Cairn down 3.63%, Hindalco down 3.48%, Tata Motors down 3.43% and SAIL down 3.16% were the major losers on the index.

Asian markets traded on a negative note, Shanghai Composite eased 0.45%, Hang Seng shed 0.70%, KLSE Composite slipped 1.27%, Straits Times dived 1.18%, Seoul Composite deposed 5.73% and Taiwan Weighted got pounded by 3.55%.

On the other hand only Jakarta Composite surged 1.07%.

Stock markets in Japan remained closed in observance of a public holiday.

The European markets traded on an optimistic note as France’s CAC 40 surged 1.40%, Germany's DAX garnered 1.11% and Britain’s FTSE 100 soared 1.16%.