Markets trade steady, oil & gas remains the leader

Indian markets trading steady were maintaining their early gains, with benchmarks adding half a percent to their last session’s rally. Till now there is not even iota of profit taking and apart from blue-chips broader markets too are participating equally in the upmove. The rally mood that started with Iran reaching a deal with the world powers which would allow the country to sell its crude without sanction, got supported with Petroleum Minister Dharmendra Pradhan's statement that International oil prices will come down with the imminent lifting of sanctions against Iran and benefit India. Traders have even overlooked the disappointing export data; value of exports for June was $22.89 billion, down 16 percent year-on-year. Trade deficit in June increased by 4% to $10.83 billion, compared  to $10.41 billion in May. The weakness in rupee too was unable to deter the sentiments of the markets and the benchmarks were trading near their three months high. On the sectoral front, the oil & gas pack has taken the lead followed by the banking stocks, till now none of the sectoral indices were showing any weakness.

The BSE Sensex is currently trading at 28336.82, up by 138.53 points or 0.49% after trading in a range of 28245.81 and 28374.44. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were outperforming the benchmarks; the BSE Mid cap index was up by 0.87%, while Small cap index gained 0.60%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.02%, Bankex up by 0.97%, PSU up by 0.71%, Consumer Durables up by 0.64%, Power up by 0.64%

The top gainers on the Sensex were Axis Bank up by 2.65%, HDFC up by 1.62%, HDFC Bank up by 1.25%, Reliance Industries up by 1.14% and Sun Pharma Inds. up by 0.81%. On the flip side, Mahindra & Mahindra down by 1.22%, Vedanta down by 1.03%, Hindalco down by 0.81%, Wipro down by 0.62% and Hero MotoCorp down by 0.61% were the top losers.

Meanwhile, responding to the charges of a non-governmental organization (NGO), the Supreme Court while terming Centre’s drug pricing policy to be unreasonable and irrational for fixing prices at the very high level, has asked the government to review its market-based drug pricing policy within six months. All India Drug Action Network, the NGO, had flagged several concerns about the Drug Price Control Order (DPCO) of 2013. These included the fact that the DPCO had left out several life-saving medicines from the order, changed the pricing formula and left out drugs required in national health programmes to check diseases such as malaria, TB and HIV. The DPCO lists 348 drugs for price control. The NGO wants the list to be extended to include all drugs on the national list of life-saving drugs.

The NGO had also contended that DPCO must also extend to all strengths, combinations and dosages, as the 2013 order excluded fixed dose formulations, essential medicines of the same chemical drug, preparations appropriate for children and patented drugs.

A bench, comprising Justices TS Thakur, V Gopala Gowda and R Banumathi, while keeping the petition pending, directed that all these issues will now be looked at by the Union ministries of health, and chemicals and fertilizers and the ministries will have to give reasoned orders to justify any decision.

The bench prima facie observed that the new government pricing policy was 'absurd, irrational' as it was based on market prices. One of the member even stated that 'What kind of control is this? The allegation is that power drug manufacturing lobby has taken control and the policy is not pro-poor but pro-companies.' The bench also noted that instead of the earlier cost-based pricing, the new pricing of averaging the profits meant that the government was legitimising profiteering.

The CNX Nifty is currently trading at 8567.75, up by 43.95 points or 0.52% after trading in a range of 8542.90 and 8575.75. There were 31 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.86%, Tech Mahindra up by 2.67%, BPCL up by 2.03%, HDFC up by 1.79% and Kotak Mahindra Bank up by 1.64%. On the flip side, Mahindra & Mahindra down by 1.28%, Vedanta down by 1.17%, NMDC down by 0.78%, Bank Of Baroda down by 0.70% and Hindalco down by 0.66% were the top losers.

The Asian markets were showing a mixed trend, Shanghai Composite was up by 10.29 points or 0.27% to 3,816.00, Straits Times gained13.15 points or 0.39% to 3,352.01, KOSPI Index was higher by 14.98 points or 0.72% to 2,087.89 and Nikkei 225 surged by 136.79 points or 0.67% to 20,600.12.

On the other hand, Jakarta Composite declined by 31.96 points or 0.65% to 4,869.85, Taiwan Weighted lost 11.99 points or 0.13% to 9,042.21, Hang Seng was lower by 3.42 points or 0.01% to 25,052.34 and FTSE Bursa Malaysia KLCI was tad down by 0.03% to 1,726.73.