Benchmarks magnify gains; Nifty above 8100 mark

After mild weakness in early trade, benchmark equity indices have gained some momentum in late morning deals on sustained buying by funds and retail investors, driven by rising optimism over trade ties with China. India has signed a 5-year trade and economic cooperation agreement with China with a view to improve the trade balance and obtain USD 20 billion Chinese investments. Besides, sentiments also remained upbeat as fears of capital outflows receded on US Fed's continued pledge to retain rates at low levels. Some support also came with Finance Secretary Arvind Mayaram’s statement that India is following economic growth inducing policies and is confident that the GDP will rebound to over 7 percent in 2-3 years. However, upside gains may be capped as selling by foreign funds is likely to weigh on some investor sentiment. Foreign funds sold shares worth Rs 9.5 crore on September 18, as per provisional stock exchange data.

Among the BSE sectoral indices, good buying was observed in information technology (IT), Consumer Durables and Power sectors, while selling pressure was seen in FMCG, Capital Goods and Banking sectors. In scrip specific development, shares of Cipla gained after the company signed an agreement with American company Salix Pharmaceuticals, under which Cipla has granted Salix exclusive rights over certain patent applications in the 'Rifaximin Complexes' patents owned by Cipla. Furthermore, Biocon rose after Silver Leaf Oak picked up a 10% stake in Biocon’s research services arm Syngene International for Rs 380 crore.

On global front, Asian markets mostly rose after the Federal Reserve stuck to its timetable on hiking interest rates but indicated they could rise more sharply than initially envisaged. Back home, extending its rising streak for the fourth straight day, Indian rupee has strengthened by 10 paise to 60.74 against the US dollar in early trade on continued selling of the American currency by exporters. The market breadth on BSE was positive, out of 2426 stocks traded, 1492 stocks advanced, while 857 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27176.32 up by 64.11 points or 0.24% after trading in a range of 27189.73 and 27070.76. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.88%, while Small cap index gained 1%.

The gaining sectoral indices on the BSE were IT up by 1.85%, TECK up by 1.49%, Consumer Durables up by 0.44%, Power up by 0.32% and Oil & Gas up by 0.27%, while FMCG down by 0.24%, Capital Goods down by 0.19%, Bankex down by 0.08% and Realty down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.97%, Cipla up by 1.64%, Wipro up by 1.30%, Hindalco up by 1.29% and Tata Power up by 1.25%. On the flip side, Axis Bank down by 1.10%, Hero MotoCorp down by 1.04%, Hindustan Unilever down by 1.00%, Mahindra & Mahindra down by 0.92% and GAIL India down by 0.91% were the top losers.

Meanwhile, Pharma companies are not likely to get respite anytime soon, as the National Pharmaceutical Pricing Authority (NPPA) has brought prices of another 43 essential medicines to treat diseases like tuberculosis or heart ailments under a control regime, even though the Delhi High Court asked the Centre and the pharmaceutical companies to resolve the drug pricing issue. Last month, 56 drug formulations were brought under the price control regime.

The 43 drugs that were brought under the control regime include the BCG vaccine (which also falls under the public-funded Universal Immunisation Programme), antibiotics such as ciprofloxacin HCl and rifampicin (used to treat tuberculosis), and cardiovascular medicines like acetyl salicylic acid. Besides, the NPPA has also revised prices of 20 medicines. The move is likely to impact the major drug makers such as Ranbaxy, Cipla, Cadila Health, and Lupin.

Presently the government directly caps prices of 348 formulations at the average price of all medicines in a particular segment with at least one per cent market share. Bringing more medicines under the price control regime has resulted in friction between the Government and the pharmaceutical industry, resulting in litigation. In July NPPA had brought prices of over 100 non-scheduled drugs under price control as per paragraph 19 of Drug Prices Control Order (DPCO). Organization of Pharmaceutical Producers of India’s (OPPI) had opposed the move to fix caps on the prices of over 100 drugs which were non-scheduled formulations and lie outside the scope of National List of Essential Medicines (NLEM).

The CNX Nifty is currently trading at 8,140.40 up by 25.65 points or 0.32% after trading in a range of 8,145.80 and 8,107.80. There were 26 stocks advancing against 24 declining on the index.

The top gainers on Nifty were HCL Tech up by 3.00%, TCS up by 2.77%, Tech Mahindra up by 2.35%, Asian Paints up by 2.05% and Grasim Industries up by 1.93%. On the flip side, Axis Bank down by 1.28%, Jindal Steel & Power down by 1.09%, Mahindra & Mahindra down by 1.06%, Hindustan Unilever down by 1.02% and GAIL India down by 0.87% were the top losers.

Asian markets were trading in the green; Straits Times rose 0.28%, Nikkei 225 strengthen by 1.56%, Jakarta Composite spurted by 0.69%, FTSE Bursa Malaysia KLCI gained by 0.32%, Hang Seng jumped by 0.40%, KOSPI Index added by 0.39%, Taiwan Weighted was up by 0.26% and Shanghai Composite was up by 0.06%.