Local equities continue to trade in positive trajectory

Local equity benchmarks continue to trade in positive trajectory in the morning session, with frontline gauges gaining over half a percent. Indices like Bank and Oil & Gas inched higher with the up-move on the benchmarks. Buoyant Mid-caps and Small-caps were also gaining around half a percent. Traders took note of private report stating that government is responding well to the rising trade tensions between the world's two largest economies, maintaining a stance that serves the cause of Indian exporters best. Traders shrugged off a private report which stated that the Indian growth story has been far from perfect. That is not an understatement by any stretch of imagination. A growing challenge for the economy is the fast-evolving problem of inequality. Besides, a report also stated that Private Equity (PE) investments moderated to $14.60 billion during January-September period, owing to macroeconomic concerns, market volatility and valuations of companies.

On the global front, Asian markets were trading mostly in green, recovering from initial weakness as investors weighed the potential impact from state support for mainland equity markets. Back home, on the sectoral front, Pharmaceutical stock slipped despite ICRA in its latest report said that the growth trajectory for the Indian pharmaceutical industry is likely to be moderate at 7-9 percent in the period between FY18 and FY21.

The BSE Sensex is currently trading at 34057.09, up by 209.86 points or 0.62% after trading in a range of 34036.69 and 34300.97. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.40%, while Small cap index was up by 0.57%.

The top gaining sectoral indices on the BSE were Realty up by 1.92%, Oil & Gas up by 1.55%, Energy up by 0.96%, Bankex up by 0.92% and Metal was up by 0.81%, while IT down by 0.73%, Healthcare down by 0.68% and TECK was down by 0.50% were the few losing indices on BSE.

The top gainers on the Sensex were HDFC up by 2.17%, Asian Paints up by 2.12%, Indusind Bank up by 1.84%, ICICI Bank up by 1.79% and Mahindra & Mahindra was up by 1.74%. On the flip side, Sun Pharma down by 1.91%, Wipro down by 1.88%, TCS down by 0.89%, Coal India down by 0.72% and Bajaj Auto was down by 0.66% were the top losers.

Meanwhile, the rating agency ICRA in its latest report has said that the growth trajectory for the Indian pharmaceutical industry is likely to be moderate at 7-9 percent in the period between FY18 and FY21, on the back of healthy demand from the domestic market given increasing spend on healthcare along with improving access, though constrained by regulatory interventions and slowing growth from the US given the relatively moderate growth prospects. It pointed out that the concerns in the domestic market pertain to price control and mandatory genericisation whereas US concerns pertain to relatively moderate proportion of large size drugs going off patent, increased competition leading to price erosion albeit at moderate pace, generic adoption reaching saturation levels and regulatory overhang along with base effect catching up.

According to the report, the revenue growth from US remained sluggish during June quarter at 1.5 percent, compared with 4 percent in FY17 and minus 13.1 percent in FY18 despite consolidation benefits. It stated that the growth momentum for US business is likely to remain in low single digit for FY19, led by limited near term first to file (FTF) generic opportunities, pricing pressures and product rationalisation for US base business. It added that the aggregate domestic growth was 27.2 per cent in June quarter, compared with 4.6 per cent in FY18 and minus 8.8 per cent in June quarter last year.

ICRA further expects R&D budgets to remain at 8.6-8.8 percent given the growing focus both on regulated markets and complex molecules/therapy segments such as injectables, inhalers, dermatology, controlled-release substances and bio-similars. It also noted that Indian companies have gained adequate scale and drug development capabilities over last decade of growth which will keep them in good stead to capture new opportunities in the developed market.

The CNX Nifty is currently trading at 10215.05, up by 68.25 points or 0.67% after trading in a range of 10203.20 and 10290.65. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 4.89%, BPCL up by 4.54%, IOC up by 3.42%, Hindalco up by 3.12% and HPCL was up by 3.03%. On the flip side, Bajaj Finserv down by 2.07%, Dr. Reddy’s Lab down by 1.87%, Tech Mahindra down by 1.84%, Sun Pharma down by 1.78% and Wipro was down by 1.73% were the top losers.

Asian markets were trading mostly in green; KOSPI rose 1.56 points or 0.07% to 2,107.66, Taiwan Weighted gained 14.60 points or 0.15% to 9,789.80, Nikkei 225 surged 180.47 points or 0.81% to 22,191.25, Straits Times soared 17.95 points or 0.59% to 3,049.34, Hang Seng advanced 205.33 points or 0.8% to 25,551.88 and Shanghai Composite was up by 39.67 points or 1.51% to 2,634.50.

On the other hand, Jakarta Composite was down by 3.87 points or 0.07% to 5,794.02.