Indian equity markets remain flat

Mon, 11 Mar 11:30 am

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Indian equity markets remained flat during the previous two hours of trade. The most noticeable upward movements were witnessed in the healthcare and realty sectors while capital goods and metals faced the maximum selling pressures.

At the time of writing, the BSE-Sensex was up by 10 points and NSE-Nifty was up by 6 points. BSE Mid Cap index and BSE Small Cap index were trading higher by 0.37% and 0.19%. The rupee was trading at 54.48 to the US dollar.

All except two Mining stocks, Coal India and Gujrat NRE Coke were trading in the red. According to a leading financial daily, Coal India was found to abuse its monopoly status by arm twisting its customers. An investigation was launched by the Competition Commission of India (CCI) after state-run utilities, Maharashtra State Power Generation Company (Mahagenco) and the Gujarat State Electricity Corporation (GSEC) alleged that Coal India and its subsidiaries were abusing their monopolistic might to impose unfair terms on buyers. GSEC further alleged that even if it rejected poor-quality coal supplied by Coal India, Coal India would still regard the supply as deemed delivery and expected GSEC to pay. Poor-quality coal increased costs for the state run utilities. The CCI gave Coal India four weeks to respond to the charges after it found out that Coal India violated the Competition Act by acting in an unfair and discriminatory manner. The CCI investigation also found out that the terms and conditions of CIL's fuel supply agreements (FSAs') were drafted unilaterally without consulting any other parties at any stage.

Indian Pharma stocks were trading on a mixed note with Aurobindo Pharma and Ranbaxy Labs leading the gains while Strides Arcolab and Orchid Chemicals ltd the losses. According to a leading business daily, Dr Reddy's Limited (DRL) were re-thinking about their German operations strategy given the fact that the entire German Pharma market has moved towards the tender based system, where margins are very low. DRL participated in the AOK tenders included within the tender based system but again it was not satisfied with the margins. During the quarter ended December 2012, DRL reported revenues of around Euro 19 m or around Rs 1350 m, which dragged down its European revenues by 21% YoY. The Company also faced troubles in the US market as its product approvals got delayed and accordingly, the company also refrained from giving any guidance with respect to product launches in the quarter ended December 2012 for the foreseeable future. DRL's stock was trading down by 0.46%.