Sensex, Nifty slips into red; pharma stocks fall on new drug pricing policy

Indian equity markets slipped into negative territory in the late morning session, following a positive start amid alternate bouts of buying and selling. Investors remained cautious as they were looking for developments in the winter session of Parliament for further impact. The 30-share BSE Sensex was down 20 points, while 50-share NSE Nifty fell 8.25 points. In currency markets, rupee opened almost flat and then slipped for fourth day in a row against dollar tracking steady euro. On sectoral front, select stocks from consumer durables, oil, power and capital goods sectors were finding some support. Bank, realty and FMCG stocks were a bit weak. Meanwhile, pharma shares fell on new drug pricing policy where the Cabinet imposed a cap on prices of 348 essential medicines at the arithmetic average of prices of all drugs in a particular segment with more than one percent market share, a move that will reduce prices. In global markets, most Asian shares trading higher on Friday, after manufacturing surveys from China and the United States raised hopes that the global growth outlook is improving at last. Back home, the market breadth favoring negative trend; there were 1,138 shares on the gaining side against 1,151 shares on the losing side while 144 shares remain unchanged.

The BSE Sensex is currently trading at 18,496.65, down by 20.69 points or 0.11% and has touched a high and a low of 18,556.50 and 18,487.88 respectively. There were 12 stocks advancing against 18 declines on the index.

The broader indices too were trading in the green; the BSE Mid cap and Small cap indices up by 0.12% and 0.27% respectively.

The top gaining sectoral indices on the BSE were, Power up by 0.29%, CD up by 0.26%, Oil & Gas up by 0.18%, CG up by 0.08% and TECk up by 0.07% while, PSU down by 0.54%, Bankex down by 0.49%, Realty down by 0.43%, Metal down by 0.11% and HC down by 0.09% were top losers on the index.

The top gainers on the Sensex were BHEL up by 1.58%, Hero MotoCorp up by 1.09%, Sun Pharma up by 0.84%, Dr Reddys up by 0.69% and Reliance up by 0.55%.

On the flip side, Cipla was down by 1.64%, Gail was down by 1.27%, ICICI Bank was down by 0.87%, Tata Motors was down by 0.70% and Wipro was down by 0.59% were the top losers on the Sensex.

Meanwhile, with an objective to streamline the regulatory framework for pricing of drugs to ensure their availability at reasonable prices, Government of India has given approval for a new drug pricing policy- National Pharmaceutical Pricing Policy. The move will curtail prices of costly brands sold by domestic and international drugmakers in a market that already has rock-bottom medicine prices, analysts and industry officials are skeptical about the benefits of the policy.

The policy aimed at bringing 348 essential drugs under price control, was earlier approved by the Group of Ministers (GoM) on September 27 and was subsequently sent to the Cabinet. According to industry experts, the new policy is expected to cover up to 30 percent of the total drugs sold in the country. At present, the government through the National Pharmaceutical Pricing Authority (NPPA) controls prices of 74 bulk drugs and their formulations. Earlier, GoM, headed by Agriculture Minister Sharad Pawar proposed to fix prices based on weighted average of brands which have more than 1 percent market share.

However, during last month, the Supreme Court had set a deadline of November 27 for the government to finalise the policy while asking it not to alter the existing mechanism of cost-based drug pricing. The government has also considered providing sufficient opportunity for innovation and competition to support the growth of the Indian pharma industry. The policy, however, took long to finalise due to differences between ministries of health and chemicals and fertilisers.

S&P Nifty is currently trading at 5,619.50, down by 8.25 points or 0.15% and has touched a high and a low of 5,637.75 and 5,619.55 respectively. There were 17 stocks advancing against 32 declines and 1 remains unchanged on the index.

The top gainers of the Nifty were Asian Paint up by 1.84%, BHEL up by 1.51%, HCL Tech up by 1.24%, Hero MotoCorp up by 1.04% and Sun Pharma up by 0.83%.

On the flip side, Ranbaxy down by 2.08%, Cipla down by 1.46%, Gail down by 1.38%, Siemens down by 1.00% and Grasim down by 0.99%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite was up by 0.88%, Hang Seng gained 0.49%, Straits Times gained 0.12%, Seoul Composite was up by 0.59% and Taiwan Weighted surged by 3.10%.

On the flip side, Jakarta Composite was down by 0.14%, KLSE Composite was down by 0.28% were the only losers amongst Asian pack.

The Japanese market remained closed today.