Benchmarks extend losses; Realty, Capital Goods drag

Indian equity extended losses to continue its weak trade in the late afternoon session on account of selling in frontline blue chip counters taking cues from European counterparts. Traders were seen selling in Realty, Capital goods and Metal sector stocks. Hectic activity was witnessed in Pharma stocks after the Department of Pharmaceuticals withdrew guidelines issued by it on May 29 which gave National Pharmaceutical Pricing Authority (NPPA) the powers to fix the prices of drugs that are not on the essential medicines list. In scrip specific development, Delhi-based real estate developers DLF and Unitech was trading in red after the Delhi government reportedly announced up to 20% increase in circle rates effective from September 23, 2014. Pidilite Industries was trading in green after it acquired adhesive business of Blue Coat on a slump sale basis for a cash consideration of Rs 263.57 crore.

On the global front, the Asian markets were trading mostly in red while the European markets too traded on a pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,100 and 27,000 levels respectively. The market breadth on BSE was negative in the ratio of 870:2001 while 91 scrips remained unchanged.

The BSE Sensex is currently trading at 26919.06, down by 287.68 points or 1.06% after trading in a range of 26844.73 and 27256.87. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.25%, while Small cap index down by 1.59%.

The losing sectoral indices on the BSE were Realty down by 4.05%, Capital Goods down by 1.77%, Metal down by 1.74%, Oil & Gas down by 1.72%, PSU down by 1.60%, while there were no gaining sector on the indices.

The top gainers on the Sensex were Hindustan Unilever up by 1.05%, Maruti Suzuki up by 0.92%, Wipro up by 0.76%, Hero MotoCorp up by 0.54% and NTPC up by 0.48%. On the flip side, Cipla down by 3.22%, Tata Motors down by 3.19%, Hindalco down by 2.93%, Coal India down by 2.10% and ONGC down by 2.00% were the top losers.

Meanwhile, in a bit of the relief to the pharmaceutical industry, the Department of Pharmaceuticals has withdrawn guidelines issued by it on May 29 which gave National Pharmaceutical Pricing Authority (NPPA) the powers to fix the prices of drugs that are not on the essential medicines list in response to a plea filed by an organization of drug manufacturers challenging the drug regulator’s July 10 notification that brought over 100 medicines under price control.

The industry, which off-lately has been baffled by the increasing number of medicines adding to the list of essential medicines, strongly protested against this matter of fixing price cap for non essential drugs. Despite this, reports suggests that the decision to withdraw the drug pricing authority's powers to fix the prices of non-essential medicines will be on a prospective basis, and will not affect price caps imposed in July on 108 drugs.

NPPA had taken the industry by surprise on July 10, when it invoked the rarely used clause of Paragraph 19, which allows price control outside of the list of essential medicines under extraordinary circumstances and imposed price caps on 108 non-essential drugs, which are used to treat diseases ranging from diabetes to HIV/AIDS. The move of price control was driven by huge inter-brand price difference seen in most drug categories. NPPA had used the term 'exploitative pricing' for such situations where medicines become unaffordable or hugely expensive for patients, in a market which pays out of pocket.

However, the industry bodies had taken representations to the government, opposing the order and pressure had been building up on the drug regulator. Both Indian drug lobbies Indian Pharmaceutical Alliance and MNC group Organisation of Pharma Producers of India had legally challenged the order in separate petitions, questioning the use of Para19 and NPPA's jurisdiction to carry out the order.

The CNX Nifty is currently trading at 8057.45, down by 88.85 points or 1.09% after trading in a range of 8037.80 and 8159.75. There were 11 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 1.12%, Tech Mahindra up by 1.12%, HCL Tech up by 1.04%, Maruti Suzuki up by 0.88% and Wipro up by 0.62%. On the flip side, DLF down by 5.55%, Tata Motors down by 3.48%, Cipla down by 3.33%, Hindalco down by 3.14% and Mahindra & Mahindra down by 2.48% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 118.42 points or 0.49% to 23,837.07, Nikkei 225 decreased 115.27 points or 0.71% to 16,205.90, Taiwan Weighted decreased 49.75 points or 0.54% to 9,084.90, Jakarta Composite decreased 31.28 points or 0.6% to 5,188.53, KOSPI Index decreased 10.36 points or 0.51% to 2,028.91 and FTSE Bursa Malaysia KLCI decreased 5.81 points or 0.31% to 1,840.24.

On the other hand, Straits Times increased 0.67 points or 0.02% to 3,297.24 and Shanghai Composite increased 19.85 points or 0.87% to 2,309.72.

The European markets were too trading in red; Germany’s DAX decreased 79.52 points or 0.82% to 9,670.02, France’s CAC decreased 56.4 points or 1.27% to 4,386.15 and UK’s FTSE 100 decreased 72.91 points or 1.08% to 6,700.72.