Sensex, Nifty extends early losses; Metal down by 2.24%

Tracking weak global sentiment, Indian equity markets extended early losses and currently trading near low point of the day on late morning session. Benchmark indices were under pressure due to host of reasons like European debt crisis, slowing growth in US and China, uncertain monsoons and government’s policy inaction in the country. In currency markets, rupee extended losses as the American currency gained strength against other currencies overseas. On sectoral front all were trading in red. Stocks from metal, consumer durables, realty and automobile sectors were among the most prominent losers. In global markets, Asian shares were trading in deep red. Back home, the market breadth favoring negative trend; there were 876 shares on the gaining side against 1,504 shares on the losing side while 106 shares remained unchanged.

The BSE Sensex is currently trading at 16768.22 down by 149.86 points or 0.89% after trading as high as 16899.01 and as low as 16736.60. There were 4 stocks advancing against 25 declines on the index, while one remained unchanged.

The broader indices were trading on a negative note; the BSE Mid cap index down 0.94% while Small cap index was down 0.88%.

There was no gainer on the BSE sectoral, while Metal down by 2.24%, CD down by 1.57%, Auto down by 1.24%, Power down by 1.23%, and Realty down by 1.23% were the losers on the index.

HDFC Bank up by 0.15%, Sun Pharma up by 0.12%, HDFC up by 0.08% and Gail India up by 0.07% were major gainers on the Sensex, while Jindal Steel down by 4.00%, Bharti Airtel down by 2.97%, Wipro down by 2.79%, Hindalco Inds down by 2.18% and Sterlite Industries down by 2.06% were major losers in the index.

Meanwhile, amid prolonged inter-ministerial squabbling over crucial components of the new policy, the ball is now thrown in Prime Minister’s Office (PMO) court, who would take a final call on the norms for allowing foreign direct investment (FDI) in the pharmaceutical sector. After reaching at final consensus at a meeting held on July 24, which was attended by the officials of the Departments of pharmaceutical, health, DIPP and the Department of Economic Affairs (DEA) , the recommendation have been now passed on to PMO for final approval. The meeting was attended by officials from these departments, where various views on imposition of specific conditions on foreign investors, were considered.

Worried over the continued delay in giving shape to a new document, the PMO, had recently wrote to finance and industry ministries seeking a progress report on implementation of the changes in the foreign direct investment policy in the pharmaceutical sector, which was finalized nine months ago.

The issue of relaxing FDI norms in the pharmaceutical sector has been long pending because of bitter spat between the Finance Ministry and DIPP, with the latter vouching for 100% FDI via Foreign Investment Promotion Board (FIPB) route, while the former seeking a FDI cap at 49% in the pharmaceutical sector. The Finance Ministry’s special group has suggested that it could consider permitting up to 49% FDI in the automatic route for Brownfield investments in pharmaceuticals sector, given the company’s management control remains in Indian hands.

Denying availability of cheaper drugs in the domestic market, the government had back in November, tightened the policy to ensure that sector is not controlled by foreign companies, only to mull over its traditional 10 year old policy, which now seems estranged after the series of acquisition.

The S&P CNX Nifty is currently trading at 5,085.10, down by 43.10 points or 0.84% after trading as high as 5,121.60 and as low as 5,076.60. There were 8 stocks advancing against 42 declines on the index.

The top gainers on the Nifty were HCL Tech up by 6.80%, Ambuja Cement up by 3.09%, ACC up by 0.75%, Grasim up by 0.26% and HDFC Bank up by 0.17%. While, SAIL down by 5.29%, Jindal Steel down by 4.20%, Bharti Airtel down by 3.11%, Wipro down by 2.95% and Reliance Infra down by 2.44% were the major losers on the index.

Asian equity indices were trading in red; KLSE Composite down 0.05%, Hang Seng index down by 0.80%, Nikkei 225 down 1.44%, Taiwan Weighted down 0.42%, Shanghai Composite down 0.26%, Kospi Composite Index down 1.37%, Straits Times down 0.57% and Jakarta Composite was down by 0.14%.