Late buying fuels Indian indices

Mon, 22 Apr Closing

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The Indian equity markets traded firm throughout the trading session today. The indices began the day's proceedings on a cautious note but buying across index heavyweights intensified in the subsequent hours. Although trading remained largely rangebound in the morning session, buying activity gathered momentum in the later hours ensuring a positive close for the Indian indices. While the BSE-Sensex closed higher by 153 points, the NSE-Nifty closed higher by 51 points. The BSE Mid Cap and the BSE Small Cap indices also did well to notch gains of 1% each. Gains were largely seen in banking and consumer durables stocks. IT stocks, however, were at the receiving end.

As regards global markets, most Asian indices closed firm today while European indices have also opened in the green. The rupee was trading at Rs 54.13 to the dollar at the time of writing.

Pharma stocks closed mixed today. While Sun Pharma and Lupin found favour, Ranbaxy and Dr.Reddy's closed in the red. As per a leading business daily, Lupin is looking to grow its sales at around 25% globally over the next three years. What is more, growth is expected to come in from all markets the company is present in rather any particular one. In the highly competitive US market too, Lupin expects to sustain growth levels of around 25% in the current fiscal. The company is specifically looking to gain a strong foothold in the oral contraceptive (OC) space and has garnered 11 approvals. However, it must be noted that the US generic oral contraceptive market (OC), is largely dominated by a couple of players viz., Teva and Watson. Brand loyalty is an important attribute in the OC market. Thus, while this segment is margin lucrative, Lupin could face challenges in terms of gaining market share in that space. As far as India is concerned, the company is looking to log in healthy growth rate of 20% led by new drug launches, in-licensing agreements and strategic alliances.

Mining stocks closed firm today with the key gainers being Coal India, National Mineral Development Corporation (NMDC) and Hindustan Zinc. As per a leading business daily, 82 m tonnes (MT) of coal are expected to be imported this fiscal by power generation utilities. This is to meet the requirements of import-based fuel projects and to bridge the shortfall in domestic production. Out of 82 MT, 50 MT is to meet the shortfall in supply from Coal India and the balance 32 MT is for projects running on imported coal. In FY13, the imported coal figure stood at 31.5 MT. One of the main reasons for the increase in quantum of coal imports this fiscal is due to the commissioning of Tata Power's Mundra plant in Gujarat. Meanwhile, Coal India, on its part, has outlined an investment of Rs 50 bn for FY14 primarily to increase production.