Indian equity markets remain in red

Mon, 11 Feb 11:30 am

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Indian equity markets have traded in red during the previous two hours of trade. The most noticeable upward movements have been witnessed in the consumer durables and realty sectors while capital goods and FMCG have faced the maximum selling pressures.

The BSE Sensex is down by 31 points and NSE-Nifty is down by 9 points. BSE Mid Cap index and BSE Small Cap index are trading higher by 0.06% and 0.04% respectively. The rupee is trading at 53.72 to the US dollar.

Indian Pharma stocks are trading on a mixed note with Dr Reddy's and Cipla leading the gains while Panacea Biotech and Cadila Healthcare are facing the maximum selling pressures. According to a leading financial daily, Cipla has put on hold its US$ 220 m acquisition plan involving the South African drugmaker, Medpro. Cipla had earlier announced its acquisition plan in November, 2012 with a hope of entering into the lucrative US$ 3 bn African market. Cipla's Chairman, YK Hamied stated that the Medpro is reluctant to accept Cipla's original bid price. It is believed that since the announcement of the proposed acquisition, Medpro has won several large Government contracts and thus Medpro's management is hesitant in going ahead with the original offer made by Cipla. Cipla has been trying to expand its international operations and has set up a team to look out for targets in the key regulated markets of US and Europe along with Emerging Markets such as South Africa. Medpro's dominating presence in the central nervous system and respiratory drugs in the African countries is supposed to be the main reason, which got Cipla interested.

Engineering stocks are also trading on a mixed note with Engineers India and Opto Circuits leading the gains while Bharat Earth Movers and Jain Irrigation are leading the losses. As per a leading financial daily, Blue Star is planning to set up a new manufacturing facility in South India at an estimated cost of Rs 1.7 bn to get an increasing share of the Rs 65 bn room air conditioning market in India. While the 70 years old firm has the largest market share in the commercial air conditioning space, it is has failed to make its presence felt in the room air conditioning segment given its late entry in 2011. Besides it has only two dedicated plants in Himachal Pradesh to cater to the room air conditioning market, which have failed to keep up pace with the increasing demand of Blue Star's products. That the company managed to sell 250,000 units of room air conditioners in 2012 is a testimony to the popularity of its room air conditioners among customers. . Blue Star is hoping to grow the sales of room air conditioners by 9% in 2013. Blue Star's share is trading lower by 1.4%.