Post Session: Quick Review

Indian markets could not get any respite in the new week and extended their fall for the sixth straight session. The weakness in the Asian peers spread to the Indian markets, with strong selling pressure appearing in the markets and sentiments remaining cautious on the near-term outlook for stocks. While there were some weak earnings announcements, report of India’s Manufacturing Purchasing Managers’ Index, showing a weakest rise in output in current 24-month, posting a 22-month low of 50.7 in October against 51.2 in September, weighed heavily on the markets. Traders were not paying any heed to Finance Minister Arun Jaitley’s statement that the government was looking to ease foreign direct investment rules and reduce the number of approvals needed to speed up investment. Revenue secretary Hasmukh Adhia too had said that the government is preparing a roadmap to reduce the number of existing tax-related litigations, including out-of-court settlement.

The Asian markets made mostly a dismal closing on reports of contraction in China’s manufacturing sector and a plunge in South Korean exports. The Chinese market itself showed huge volatility and once entered the green but ended finally with loss of around two percent. The central bank’s indication of further opening up was overshadowed with official Manufacturing PMI figure showing contraction for a third consecutive month, coming at 48.3 in October. The European markets too made a soft start after report of Spain's manufacturing sector growing at the slowest pace since December 2013 in October.

Back on street, there was valiant attempt in the final hours that pruned the losses by last and helped the Nifty recover the 8000 mark, which it had lost intraday but still the markets could not make it to green, the broad based sell-off that was seen in early part of trade just got halted with major benchmarks closing down by over a quarter percent, some of the bluechips kept dragging the markets till last. On the sectoral front, the auto sector kept buzzing, Tata Motors, M&M gained on higher sales Maruti Suzuki India, the country's largest carmaker, too was up by over a percent after reporting a 29.1 per cent rise in total sales at 1,34,209 units last month. On the other hand Bajaj Auto fell over 4 per cent as October sales were below estimates. Banking sector that had made a good start after international ratings agency Moody’s Investor Services said it has revised its outlook on the Indian banking system to stable from negative, owing to the changing operating environment of local banks, managed to end flat with a positive bias. Moody’s expects the recovery in Indian banks to be ‘U’ shaped rather than ‘V’ shaped. The ratings agency has also said that apart from improvement in operating environment for local banks, it also saw stability in drivers such as asset risk and capital, funding and liquidity, profitability and efficiency and government support.

There was gloom at new listing front too, shares of Coffee Day Enterprises, which runs the Cafe Coffee Day chain, fell 17.64% in its debut to 270.15 on the BSE. The IPO was oversubscribed 1.8 times and priced at Rs 328, the top end of the expected price range of Rs 316-Rs 328.

The BSE Sensex ended at 26545.19, down by 111.64 points or 0.42% after trading in a range of 26378.26 and 26824.30. There were 15 stocks in green against 15 stocks in red on the index. (Provisional)

The broader indices made a mixed closing; the BSE Mid cap index ended up by 0.12%, while Small cap index lost 0.21%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 0.91%, Consumer Durables up by 0.53%, FMCG up by 0.33%, Oil & Gas up by 0.30%, TECK up by 0.26%, while, Metal down by 1.27%, Capital Goods down by 1.05%, Power down by 0.18%, PSU down by 0.15% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 1.82%, Coal India up by 1.45%, Reliance Industries up by 1.08%, Maruti Suzuki up by 0.93% and Axis Bank up by 0.75%. On the flip side, Bajaj Auto down by 4.69%, Tata Steel down by 3.44%, Hindalco down by 3.33%, Vedanta down by 3.30% and Sun Pharma Inds. down by 2.81% were the top losers. (Provisional)

Meanwhile, in order to review the Drug Price Control Order (DPCO) 2013, the government has formed an inter-ministerial committee, following the Supreme Court verdict this year that termed the drug pricing policy as irrational and unreasonable. The committee will look into the drug pricing mechanism specifically in the market based pricing formula which is being used at present under DPCO 2013.

An inter-ministerial committee comprising representatives from Department of Industrial Policy & Promotion (DIPP), Ministry of Health, National Pharmaceutical Pricing Authority (NPPA) and Department of Pharmaceuticals have been formed following the Supreme Court orders to look into the pricing of drugs as there have been complaints that the companies are making significant profits which go up to few thousand per cent.

Earlier in July, the Supreme Court had observed that the centre was fixing maximum price of a medicine above the retail price of the leading company, after hearing the NGO All India Drug Action Network petition. According to the NGO’s petition one of the five issues to be considered by the government includes that MBP (Market Based Pricing) was never used for any price regulatory purposes and this was making medicines costlier. Besides, the NGO had also sought inclusion of more life-saving medicines of diseases like diabetes and tuberculosis in the list of drugs whose prices would be regulated by the government.

Additionally, as per the NGO petition, under the new policy simple average ceiling prices were, in many cases, higher than the market leader price. Till date, the authority has fixed the ceiling price of 530 formulations from the list As set under DPCO 2013, drug price regulator NPPA fixes the ceiling price of essential medicines of schedule-I. And no one is authorised to sell any scheduled medicine to a consumer at a price higher than the one notified by NPPA under the order. While fixing the ceiling price, 16 per cent margin is allowed for retailers. For non-scheduled formulations, there is no control over the launch price. In respect of medicines not under price control, manufacturers are allowed to increase the maximum retail price (MRP) by 10 per cent annually.

The CNX Nifty ended at 8055.65, down by 10.15 points or 0.13% after trading in a range of 7995.60 and 8060.70. There were 33 stocks on gainers side against 17 stocks on decliners’ side on the index. (Provisional)

The top gainers on Nifty were Tech Mahindra up by 3.23%, Mahindra & Mahindra up by 2.06%, Yes Bank up by 1.87%, Coal India up by 1.59% and Ultratech Cement up by 1.48%. On the flip side, Bajaj Auto down by 4.54%, Hindalco down by 3.51%, Tata Steel down by 3.24%, Vedanta down by 3.10% and Sun Pharma Inds. down by 2.66% were the top losers. (Provisional)

European markets were showing a mixed trend, France’s CAC was up by 19.31 points or 0.39% to 4,916.97, Germany’s DAX gained 74.51 points or 0.69% to 10,924.65, while UK’s FTSE 100 declined by 3.14 points or 0.05% to 6,357.95.

The Asian equity markets ended mostly in red on Monday, after soft Chinese factory surveys stoked global growth concerns. Activity in China’s manufacturing sector unexpectedly shrank for a third straight month in October, fuelling fears that the economy may be cooling further in the fourth quarter despite a raft of stimulus measures. The official Purchasing Managers’ Index (PMI) was at 49.8 in October, the same pace as in previous month and lagging market expectations of 50.0. Japanese manufacturing activity in October expanded at the fastest pace in a year as new domestic and export orders increased. The Markit/Nikkei Japan Final Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 52.4 in October, slightly less than a preliminary reading of 52.5 but a solid improvement from the final reading of 51.0 in September. The index remained above the 50 threshold that separates expansion from contraction for the sixth straight month. October’s performance was the strongest in a year. The findings add to evidence that the world’s third-largest economy is recovering from a dip earlier this year as demand at home and abroad is starting to pick up. Indonesian Inflation fell to a seasonally adjusted 6.25%, from 6.83% in the preceding month. Thai CPI rose to a seasonally adjusted annual rate of -0.77%, from -1.07% in the preceding month.