Benchmarks continue weak trade in late afternoon session

Indian equity markets continued their weak trade in the late afternoon session on account of selling in frontline blue chip counters. The sentiments were under pressure after India’s manufacturing sector growth slipped further and touched a 22-month low in October largely due to a slower increase in new orders, but firms hired additional workers. Global rating agency Moody’s upgraded its outlook for the Indian banking system to stable from negative on gradual improvement in operating environment, too failed to add some support. Traders were seen piling position in Realty, Consumer Durables and Auto stocks, while selling was witnessed in Metal, Capital Goods and PSU sector stocks. In the scrip specific development, Coffee Day Enterprises, which runs Cafe Coffee Day (CCD) chain, was trading in red after debuting on a weak note, opening at Rs 313 against the issue price of Rs 328.

On the global front, the Asian markets were trading mostly in red, while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,050 and 26,500 levels respectively. The market breadth on BSE was negative in the ratio of 883:1608 while 119 scrips remained unchanged.

The BSE Sensex is currently trading at 26431.18, down by 225.65 points or 0.85% after trading in a range of 26401.28 and 26824.30. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.35%, while Small cap index down by 0.63%.

The gaining sectoral indices on the BSE were Realty up by 0.61%, Consumer Durables up by 0.52% and Auto up by 0.13%, while Metal down by 1.65%, Capital Goods down by 1.55%, PSU down by 0.96%, Power down by 0.85% and Oil & Gas down by 0.56% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.42%, Tata Motors up by 1.17%, ICICI Bank up by 0.83%, Maruti Suzuki up by 0.83% and TCS up by 0.23%.

On the flip side, Bajaj Auto down by 4.40%, Hindalco down by 4.22%, Tata Steel down by 3.30%, GAIL India down by 2.67% and Lupin down by 2.60% were the top losers.

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 is currently trading at 8013.95, down by 51.85 points or 0.64% after trading in a range of 7999.30 and 8060.65. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 3.08%, Ultratech Cement up by 1.48%, Zee Entertainment up by 1.26%, Tata Motors up by 1.16% and Tech Mahindra up by 1.09%.

On the flip side, Bajaj Auto down by 4.65%, Hindalco down by 4.10%, Tata Steel down by 3.22%, Lupin down by 2.70% and Sun Pharma down by 2.65% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 399.86 points or 2.1% to 18,683.24, Hang Seng decreased 270 points or 1.19% to 22,370.04, Shanghai Composite decreased 57.48 points or 1.7% to 3,325.08, Jakarta Composite decreased 5.84 points or 0.13% to 4,449.34 and FTSE Bursa Malaysia KLCI decreased 2.56 points or 0.15% to 1,663.15.

On the other hand, KOSPI Index increased 5.77 points or 0.28% to 2,035.24 and Taiwan Weighted increased 60.46 points or 0.71% to 8,614.77.

The European markets were trading in red; Germany’s DAX decreased 52.75 points or 0.49% to 10,797.39, France’s CAC decreased 31.21 points or 0.64% to 4,866.45 and UK’s FTSE 100 decreased 30.24 points or 0.48% to 6,330.85.