Markets pare early gains; continue to trade marginally in green

Indian equity benchmarks pared some early gains, but continued to trade in green on account of positive Asian cues and buying witnessed in front line blue chip stocks like Hindalco Inds, Maruti Suzuki, RIL and Infosys. Investors’ sentiment got some support after Economic Affairs Secretary Arvind Mayaram has said that the government is taking measures to provide a boost to economic growth. Further, PMEAC Chairman C Rangarajan statement that country’s current account deficit (CAD) will be contained below target limit also added to the optimistic sentiments. Realty was the top gainer among the sectoral indices on the BSE up by around 1.60% followed by capital goods and oil and gas stocks. Banking stocks were trading marginally in green as the global credit rating agency Moody’s maintained negative outlook for Indian banking industry. However, market gains were offset by selling witnessed in consumer durables, FMCG and power stocks. On stock specific movement, Hindalco Inds, Maruti Suzuki and Jindal Steel were trading up by over 2%, while, SSLT, BHEL and TCS were down by over 0.80% on BSE. Among other stocks, Shalimar Paints rallied nearly 15% at Rs 95 on back of heavy volumes on the bourses. Jet Airways (India) is trading higher by around 2.5% on reports that the board of directors of the company will meet tomorrow to finalise the preferential allotment of 24% equity to Etihad Airways.

On Global front, Asian markets were trading in green with Shanghai Composite up by 0.01% and Taiwan Weighted up by 0.84%, on the back of China's economic reform plans. Back home, the NSE Nifty and BSE Sensex were trading over their psychological 6,200 and 20,500 levels respectively. The market breadth on BSE was positive, out of 2,094 stocks traded, 1,075 stocks advanced, while 883 stocks declined on the BSE.       

The BSE Sensex is currently trading at 20,904.97 up by 54.23 points or 0.26% after trading in a range of 20,934.40 and 20,852.87. There were 16 stocks advancing against only 14 declining on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.35%, while Small cap index up by 0.25%.

The gaining sectoral indices on the BSE were Realty up by 1.60%, Capital Goods up by 0.98%, Oil and Gas up by 0.64%, Auto up by 0.54% and Teck up by 0.24%. While, Consumer Durables down by 0.24%, FMCG down by 0.23% and Power down by 0.22% were losing indices on BSE.

The top gainers on the Sensex were Hindalco Inds up by 3.66%, Maruti Suzuki up by 2.94%, Jindal Steel up by 2.15%, Gail India up by 1.76% and L&T up by 1.59%. On the flip side, SSLT down by 2.04%, BHEL down by 0.86%, TCS down by 0.80%, Bajaj Auto down by 0.79% and HDFC Bank down by 0.68%.

Meanwhile, amid rising concerns over increasing acquisitions of domestic pharma firms by multinationals, Foreign Direct Investment (FDI) in the pharma sector grew by more than doubled to $ 1.07 billion during April-August’ 2013 as compared to $ 487 million during  the same period last year.

The commerce and industry ministry is presently concerned over the rising acquisitions in domestic pharmaceutical industry and is proposing to tighten the FDI policy for the sector by incorporating conditions like mandatory investment in R&D and non-compete clause in the shareholders pact. The government is of the view that continuing acquisitions of Indian pharma firms by foreign companies would pose serious problems in availability of life-saving drugs to consumers in near future. It also wants restrictions on FDI in brown-field or existing pharma companies amid rising fears that such acquisitions could shrink India’s capacity of producing low-cost generic drugs. During the period from April 2012 to April 2013, over 96 percent of the total FDI in the sector has come into brown-field pharma.

Recently, the government has approved a Rs 5,168 crore proposal of US-based pharma firm Mylan Inc's to acquire Indian generic drugs company Agila Specialties. Such acquisition is likely to impact the industry genetic segment, which accounts for the largest chuck of the sector, with a share of around 72 percent in the total industry revenue. The Indian generic drug market grew at a CAGR of around 17 per cent between 2010-11 and 2012-13 mainly on the back of rising exports of generic drug due to their low cost.

The CNX Nifty is currently trading at 6,203.50 up by 14.50 points or 0.23% after trading in a range of 6,212.40 and 6,186.15. There were 26 stocks advancing against 24 declining on the index.

The top gainers of the Nifty were Hindalco Inds up by 3.87%, Maruti Suzuki up by 2.88%, Jindal Steel up by 2.02%, GAIL up by 1.82% and Bharti Airtel up by 1.52%. On the flip side, SSLT down by 2.34%, Kotak Bank by 0.89%, BHEL down by 0.82%, HDFC Bank down by 0.76% and Dr. Reddy’s Lab down by 0.75% were the major losers on the index.

The Asian equity indices were trading mixed; Shanghai Composite up by 0.01%, Taiwan Weighted up by 0.84%, Hang Seng up by 0.16%, Seoul Composite up by 0.82%, KLSE Composite up by 0.98%. While, Straits Times down by 0.25%, Jakarta Composite down by 0.36% and Nikkei 225 down by 0.21%.