Benchmarks trade flat in early deals on penultimate day of F&O expiry

Indian equity benchmarks are trading flat in early deals on Wednesday as investors opted to remain on sidelines on the penultimate day of F&O expiry. Further, selling by foreign funds also weighed on sentiment. Foreign portfolio investors were net sellers in equities to the tune of Rs 1,185 crore in the cash market and sold index futures worth Rs 316 crore on September 23, 2014. Meanwhile, stocks related to pharma sector edged higher with the Government ensuring that the National Pharmaceutical Pricing Authority (NPPA) no longer enjoys sweeping powers to control drug prices. The NPPA has been asked to withdraw the guidelines that allowed the Authority to control drug prices in public interest. However, power and coal stocks witnessed selling, as the Supreme Court will decide the fate of 218 coal blocks, which was allocated to companies illegally by the Centre.

On the global front, the US markets continued their bearish run and ended lower once again in last session, the trade remained choppy amid geopolitical concerns that US expanded its military campaign against the Islamic State into Syria. The Asian markets were trading mostly in the green at this point of time, though gains were just modest as investors remained concern about geopolitical tensions in the Middle East, combined with renewed concerns about European growth.

Back home, on the sectoral front, fast moving consumer goods and healthcare witnessed the maximum gains in trade, while capital goods, infrastructure and realty remained the top losers on the BSE sectoral space. The broader indices were struggling to get any traction, while the market breadth on the BSE was negative; there were 959 shares on the gaining side against 1,015 shares on the losing side while 80 shares remain unchanged.

The BSE Sensex opened at 26817.94; around 42 points higher as compared to its previous closing of 26775.69, and has touched a high and a low of 26844.70 and 26741.38 respectively. The BSE Sensex is currently trading at 26781.65, up by 5.96 points or 0.02%. There were 17 stocks advancing against 13 stocks declining on the index.

The overall market breadth remained in the favour of decliners with 46.69% stocks advancing against 49.42% declines. The broader indices were trading in red; the BSE Mid cap index was down by 0.39%, while Small cap index down by 0.07%.

The only gaining sectoral indices on the BSE were FMCG up by 0.90% and Healthcare up by 0.61%, while Capital Goods down by 0.85%, Infrastructure down by 0.68%, Realty down by 0.54%, Auto down by 0.47% and TECK down by 0.24% were the losing indices on BSE.

The top gainers on the Sensex were Wipro up by 1.92%, Coal India up by 1.81%, Hindustan Unilever up by 1.70% and Sun Pharma Industries up by 1.24% and ITC up by 0.94%. On the flip side, Bharti Airtel down by 1.88%, HDFC down by 1.10%, Larsen & Toubro down by 1.06%, Tata Motors down by 1.04% and Tata Steel down by 0.97% 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.

Back 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 opened at 8,015.55; around 2 points lower as compared to its previous closing of 8,017.55, and has touched a high and a low of 8,042.05 and 8,007.60 respectively.

The CNX Nifty is currently trading at 8,021.55, up by 4.00 points or 0.05%. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 1.93%, Wipro up by 1.84%, Ultratech Cement up by 1.83%, Coal India up by 1.72% and Grasim Industries up by 1.40%. On the flip side, PNB down by 1.97%, Bharti Airtel down by 1.96%, BPCL down by 1.71%, Jindal Steel & Power down by 1.59% and Tata Motors down by 1.16% were the top losers.

Asian markets were trading mostly in the green; Hang Seng increased by 92.12 points or 0.39% to 23,929.19, KOSPI Index spurted by 4.44 points or 0.22% to 2,033.35, Jakarta Composite strengthened by 14.80 points or 0.29% to 5,202.92, Shanghai Composite added 18.28 points or 0.79% to 2,328.00, FTSE Bursa Malaysia KLCI jumped 1.26 points or 0.07% to 1,841.45 and Taiwan Weighted was up by 19.91 points or 0.22% to 9,104.81.

On the flip side, Nikkei 225 tumbled by 80.67 points or 0.50% to 16,125.23 and Straits Times was down by 2.29 points or 0.07% to 3,295.80.