Indian equity markets remain weak

Wed, 20 Mar 01:30 pm

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With all-round selling across counters, Indian equity markets continued to slide in the post noon trading session. Majority of the sectoral indices are trading in the negative territory with stocks from the realty sector witnessing highest selling pressure. Only stocks from the FMCG and healthcare sector are trading in the positive.

The BSE-Sensex is down by 74 points and the NSE-Nifty is trading down by 36 points. While BSE Mid Cap is trading down by 1.5%, BSE Small Cap index is trading down by 1.6%. The rupee is trading at 54.26 to the US dollar.

Most of the MNC pharma stocks are trading in the green with Pfizer India and Sanofi India leading among the pack of gainers. As per a financial daily, the Maharashtra food and drug administration (FDA) has taken steps over the illegal supply of cough syrup having codeine (a narcotic substance commonly used in preparation of cough syrup)content. Some time back, the FDA discovered that the wholesalers in Maharashtra were siphoning off close to 2 lakhs of bottles of Phensydyl. Phensydyl is a cough syrup and is Abbott India's brand. The FDA suspects that pharma wholesalers are illegally selling large syrup consignments to fictitious buyers for non medical purposes. The consignments are being seized in order to control the codeine supply. In India, Pfizer India's brand Corex and Abbott's brand Phensydyl govern the largest market share in the cough syrup segment. Reportedly, both the companies are working in order to address the concerns. As per the regulator, the companies will have to take enough steps in order to check the supply of the drug. As per the reported data, the total cough syrup market is worth Rs 20 bn and both the brands contribute ~10% of the total cough syrup market in India.

FMCG stocks are trading mixed with Hindustan Unilever and Godrej Consumer Products leading in gains while Colgate and Jyothy Consumer are among the major losers. As per a leading financial daily, Hindustan Unilever (HUL) will commission its aerosol deodorant plant in Maharashtra soon. The plant is ready and the company is awaiting certain approvals to commence operations. The manufacturing unit will cater to the demand in India and several other markets in the region. HUL markets Axe, Denim, Dove and Sure deodorants, a significant part of which is imported. As per industry body, the Associated Chambers of Commerce and Industry of India (ASSOCHAM), the domestic fragrance industry is valued at Rs 37 bn and is growing at a compounded annual growth rate of 40%. Among fragrance, deodorants and roll-ons valued at Rs 18 bn are growing the fastest, at a rate of 55% annually. Growing awareness and increased preference for grooming and personal hygiene among the middle class with high disposable income is likely to drive demand for fragrances in the future.