Benchmarks trade lower in early deals

Benchmarks are trading in red in early deals on Thursday, as traders booked profits after previous day rally. Selling witnessed in the key heavyweights dragged the Sensex below its crucial 24,700 mark and Nifty was hovering around its crucial psychological level of 7,500. Selling in banking stock weighted the sentiment.  IndusInd Bank, HDFC Bank, Bank of Baroda, Axis Bank and State Bank of India were trading lower. However, the broader markets were outperforming the benchmarks-BSE Midcap and Smallcap indices were up about 0.35%-65%. Traders were getting encouragement with Prime Minister Narendra Modi making a fresh pitch for passage of GST and other legislations in the Rajya Sabha, considering the 'conducive atmosphere' that has been prevailing in Parliament this session with cooperation from the opposition. On the sectoral front, traders were seen piling up position in Metal, Consumer Durables, Auto, Realty and PSU, while selling was witnessed in IT, TECK and FMCG.

In the scrip specific development, Infosys traded lower by nearly 3% on the National Stock Exchange (NSE) after a huge block deal got executed on the counter.

On the global front, the US markets ended higher on Wednesday as investors cheered some strong earnings reports and oil prices jumped nearly 5 percent to mark another high for the year on data showing fall in U.S. gasoline inventories.  Asian markets were trading mostly in green, encouraged by a rally in crude oil prices and expectations that the European Central Bank will ease policy later in the day, emulating policymakers elsewhere seeking to bolster their struggling economies.

Back home, foreign portfolio investors (FPIs) bought shares worth a net Rs 462.86 crore yesterday, as per provisional data released by the stock exchanges. The market breadth on BSE was positive in the ratio of 1087: 519, while 81 scrips remained unchanged.

The BSE Sensex is currently trading at 24694.97, down by 98.99 points or 0.40% after trading in a range of 24667.15 and 24817.48. There were 14 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.37%, while Small cap index gained 0.63%.

The top gaining sectoral indices on the BSE were Metal up by 0.86%, Consumer Durables up by 0.75%, Auto up by 0.66%, Realty up by 0.62% and PSU up by 0.57%, while IT down by 0.99%, TECK down by 0.84% and FMCG down by 0.58% were the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.61%, Tata Motors up by 1.22%, ICICI Bank up by 0.83%, Hero MotoCorp up by 0.80% and Tata Steel up by 0.80%. On the flip side, Infosys down by 1.91%, Hindustan Unilever down by 1.09%, TCS down by 0.96%, Sun Pharma down by 0.76% and ITC down by 0.75% were the top losers.

Meanwhile, a committee formed last year and headed by Joint Secretary in DoP, in order to bring down drug prices has recommended putting a cap on trade margins to control exorbitant trade margins which fleece consumers. The committee which also included members from leading industry bodies, NGOs, National Pharmaceutical Pricing Authority (NPPA) and the Competition Commission of India, recommended capping the trade margins at 35 percent on all the drugs with Maximum Retail Price (MRP) of above Rs 50. For drugs priced between Rs 20-50, the panel has proposal to cap the margin at 40 percent and recommended capping the margin at 50 per cent for the drugs priced from Rs 2-20. However, the panel proposed no capping of trading margin on the medicine priced up to Rs 2.

The committee has also recommended capping margins on all drugs including stents and orthopedic implants. Further it has recommended an addition in the Drug Price Control Order (DPCO 2013), so that no manufacturer can sell the drug to the trader, if its MRP exceeds the margins notified by the government from time to time.

Trading margin is the margin which wholesalers and retailers earn by selling the medicines, after the new DPCO 2013 came into force, there has been no ceiling on the trade margin of the medicines and the drug price regulator NPPA fixes prices of medicines based on average cost of all drugs in that particular segment which have market share of more than 1 per cent. Minister of State for Chemicals and Fertilisers, Hansraj Gangaram Ahir has said that the government wants the prices of medicines to be affordable for general public, but at the same we want the industry to grow. So, we have come up with this proposal and will discuss it with all stakeholders.

The CNX Nifty is currently trading at 7505.00, down by 26.80 points or 0.36% after trading in a range of 7499.45 and 7547.10. There were 22 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 3.40%, Hindalco up by 2.84%, Vedanta up by 2.05%, Tech Mahindra up by 1.41% and ONGC up by 1.32%. On the flip side, Infosys down by 2.18%, Hindustan Unilever down by 1.15%, TCS down by 1.02%, Sun Pharma down by 0.82% and BHEL down by 0.79% were the top losers.

Asian markets were trading mostly in green, FTSE Bursa Malaysia KLCI increased 4.89 points or 0.29% to 1,691.24, Taiwan Weighted increased 11.8 points or 0.14% to 8,645.91, KOSPI Index increased 12.79 points or 0.65% to 1,965.74, Hang Seng increased 145.44 points or 0.73% to 20,141.70 and Nikkei 225 increased 163.9 points or 0.98% to 16,806.10

On the flip side, Jakarta Composite decreased 45.21 points or 0.94% to 4,765.83 and Shanghai Composite decreased 31.97 points or 1.12% to 2,830.58.