Equity markets cool off a bit from day’s high amidst little global cues

Local equity markets have cooled off from day’s high point amidst little global cues; given that UK market remain shut for trade today for ‘Spring Bank Holiday’, while Asian markets continue to trade on a mixed note at this point of time. Profit-booking which emerged at lower level, mainly dragged equity markets bit lower from day’s high point, with Sensex and Nifty now trading above 18,750 and 6,000 level. Meanwhile, broader indices too witnessing some selling pressure have surrendered little portion of their gains. Drop of Capital goods counterparts, besides the fall of Auto counter, has started eating into bourses’ gains. Nevertheless, stocks from Oil & Gas, Consumer Durable and Health Care counters continue to fuel the rally at D-street. Gains of stocks of Reliance Industries mainly spelled optimism for Oil & Gas pivotal. RIL’s stocks spurted after the company announced a huge natural gas discovery, possibly the biggest find ever, in the flagging eastern offshore KG-D6 block that will be key to arresting falling output.

On the flip side, losses in Capital goods space are led by Crompton Greaves, Alstom T&D and Thermax. Shares of Crompton Greaves were witnessing selling pressure after it reported weak results for quarter ended March last Friday. The company's consolidated net profit fell 75% to Rs 25.27 crore for the fourth quarter ended March 2013 as compared to a net profit of Rs 100.32 crore in the same period last fiscal. The overall market breadth on BSE is in favour of advances which have outpaced advances in the ratio of 1129: 905; while 143 shares remain unchanged.

The BSE Sensex is currently trading at 19,852.55, up by 148.22 points or 0.75% after trading in a range of 19,891.35 and 19,678.31. There were 20 stocks advancing against 10 declines on the index.

The broader indices too pared off some gains; the BSE Mid cap and Small cap index were trading up by 0.70% and 0.59% respectively.

The top gaining sectoral indices on the BSE were, Oil & Gas up by 1.74%, Consumer Durables up by 1.55%, Health Care up by 1.22%, Teck up by 0.96% and IT up by 0.65%, while Auto down 0.60% and Capital Goods down by 0.46%, were the only loser on the sectoral index.

The top gainers on the Sensex were RIL up by 4.00%, Bharti Airtel up by 3.59%, Sun Pharma up by 3.12%, HDFC Bank up by 1.55% and HDFC up by 1.46%.

On the flip side, Mahindra & Mahindra down by 2.34%, Bajaj Auto down by 1.74%, Maruti Suzuki down by 1.57%, Cipla was down by 1.19% and ONGC down by 0.77% were the top losers on the Sensex.

Meanwhile, in order to respond to the drug safety issues raised by the US Food and Drug Administration (US FDA), India's drug regulator is working on a clear policy to respond to safety alerts by foreign regulators on medicines manufactured by Indian companies. The US FDA has blocked imports of some drugs manufactured by the Indian companies such as Wockhardt and Ranbaxy on the back of drug safety issues and also fined them.

Earlier this month, Ranbaxy had pleaded guilty and agreed to pay a $500-million fine to the US government to settle criminal and civil charges against it, while, Wockhardt's management projected that the firm may take an annual hit of $100 million as a result of the US FDA action.

The present Drugs and Cosmetics Act does not empower the drug regulator to take action based on a red-flag raised by a foreign counterpart. By modifying the present law, Indian government may take a cue from the action of foreign drug regulators; however it would assess the good manufacturing practices of Indian firms according to the Indian law (Drugs and Cosmetics Act).   

The Drug Controller General of India (DCGI) GN Singh said our decisions would strictly be based on law which has been clearly laid down by Indian drug regulator. The regulatory regimes of different countries vary and there is no one set of globally harmonized good manufacturing practices. My mandate is to ensure quality, safety and efficacy of drugs marketed in the country, while alerts by other regulators can help raise scrutiny levels here, he added.

The CNX Nifty is currently trading at 6,022.35, up by 38.80 points or 0.65% after trading in a range of 6,034.45 and 5,975.55. There were 27 stocks advancing against 23 declines on the index.

The top gainers of the Nifty were Reliance Industries up by 4.16%, Bharti Airtel up by 3.80%, IndusInd Bank up by 3.56% Sun Pharmaceuticals up by 3.27% and HDFC up by 1.56%.

On the flip side, Lupin down by 2.46%, M&M down by 2.36%, Maruti Suzuki down by 2.09%, Bajaj-Auto down by 1.79% and Grasim Industries down by 1.37% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 0.21%, Hang Seng increased 0.20%, Straits Times added 0.03%, KOSPI Composite surged 0.33% and Taiwan Weighted was up by 0.86%.

On the flip side, Jakarta Composite declined 1.45%, KLSE Composite slipped 0.27% and Nikkei 225 was down by 3.22%.