Benchmarks continue firm trade; Nifty holds 6050 mark

Indian equities continued firm trade in the late afternoon session on account of buying in frontline blue chip counters and taking cues from global counterparts. Investors took note of India’s trade deficit data for January which narrowed to $9.92 billion from $10.14 billion a month ago. Exports during the month saw a marginal spike to $26.75 billion from $26.35 billion in December. Imports rose slightly to $36.67 billion from 36.49 billion in the previous month. Traders were seen piling positions in IT, Consumer Durables and TECK stocks, while selling was witnessed in Power, Realty and Oil & Gas sector. Hectic activity was witnessed in sugar stocks ahead of Cabinet Committee on Economic Affairs (CCEA) meeting on sugar subsidy. The government is likely to decide on subsidy for export of 4 million tonnes of raw sugar. In scrip specific development, Entertainment Network India (ENIL) was trading in green as investors are buying up stocks of the company on its December quarter performance. Sun Pharmaceutical Industries was trading in green after the company’s US unit Taro Pharmaceutical Industries reported good results for the quarter ended 31 December 2013.

On the global front, the Asian markets were trading in green, while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,050 and 20,400 levels respectively. The market breadth on BSE was negative in the ratio of 1163:1289 while 117 scrips remained unchanged.

The BSE Sensex is currently trading at 20400.65, up by 66.38 points or 0.33% after trading in a range of 20,443.35 and 20,353.41. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were too trading in green; the BSE Mid cap index was up by 0.16%, while Small cap index was up by 0.11%.

The gaining sectoral indices on the BSE were IT up by 1.12%, Consumer Durables up by 0.94%, TECK up by 0.83%, Auto up by 0.75% and Bankex up by 0.46%. While, Power down by 0.77%, Realty down by 0.60%, Oil & Gas down by 0.31% and HealthCare down by 0.18% were the losing indices on BSE.   

The top gainers on the Sensex were Tata Motors up by 2.46%, Tata Steel up by 1.33%, ONGC up by 1.10%, Tata Power up by 1.06% and HDFC up by 1.02%. On the flip side, Hindalco Industries down by 1.87%, Hero Moto Corp down by 1.86%, RIL down by 1.57%, NTPC down by 1.51% and Bharti Airtel down by 1.46%.

Meanwhile, reacting strongly to US Food & Drug Administration (FDA) for imposing disproportionately strong penalties on Indian pharmaceutical companies, India has raised concerns over US FDA inspection on domestic pharma firms, adding that authority was not giving enough opportunity to Indian pharmaceutical companies to explain themselves before taking action against them for flouting quality norms. Commerce and Industry Minister Anand Sharma met US FDA Commissioner Margaret Hamburg and told that in some cases when clarifications were sought from pharmaceutical companies, the US FDA took strong action even before the clarifications could be given.

It is reported that both countries have agreed on plan that their regulators will inform each other before undertaking inspections, allowing host-country inspectors to join as observers. The regulators will also share information on any problem found in terms of lack of compliance with current good manufacturing practices, clinical practices and laboratory practices by manufactures and sponsors of medical products and cosmetics. The US FDA has also offered to help in the capacity development of Indian drug regulators, academics and industry so that there would be a better coordination between the two countries in the area. Presently, inspections are conducted by the regulators separately as countries do not have any data-sharing agreement.

The US market accounts for highest revenue for the Indian pharma industry as the country has the largest number of USFDA-approved plants for generics manufacturing. However, US FDA, an agency of the United States responsible for protecting and promoting public health through the regulation and supervision of drugs, has stepped up its efforts to ensure that only good quality medicines reach the American shores. Over one and half years, it has raised concerns over the quality of the drugs produced in India and imposed penalties on plants owned by large companies such as Ranbaxy, Wockhardt, RPG Life Sciences and Agila Specialities for flouting quality norms. The recent actions taken by the US FDA has hurt the reputation of the country’s drug industry, which is the largest supplier of low-cost generics in the world. 

The CNX Nifty is currently trading at 6,069.15, up by 15.70 points or 0.26% after trading in a range of 6,081.85 and 6,053.25. There were only 27 stocks advancing against 23 declining stocks on the index.

The top gainers of the Nifty were HCL Tech up by 3.34%, Tata Motors up by 2.66%, JP Associates up by 2.04%, Tata Steel up by 1.50% and BPCL up by 1.35%. On the flip side, Hero MotoCorp down by 1.90%, RIL down by 1.79%, Hindalco Industries down by 1.78%, PNB down by 1.60% and Ultratech Cement down by 1.41% were the major losers on the index.

The Asian equity indices were trading in green; Seoul Composite up by 0.46%, Jakarta Composite up by 0.48%, KLSE Composite up by 0.37%, Taiwan Weighted up by 0.46%, Shanghai Composite up by 0.84%, Straits Times up by 0.41% and Hang Seng up by 1.78%.

Nikkei 225 was closed for the day on account of ‘National Foundation Day’ holiday.

The European markets were trading in green; France’s CAC 40 was up 0.82%, Germany’s DAX added 0.75% and UK’s FTSE 100 gained 0.53%.