Capital goods lead gains

Fri, 24 May 01:30 pm

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Indian equity markets are trading in the green in the post noon trading session. Most of the sectoral indices are trading in the positive territory, with stocks from the capital goods and consumer durables sectors witnessing maximum buying interest. However, stocks from the IT and healthcare segment are witnessing selling pressure.

BSE-Sensex is up by 42 points and NSE-Nifty is trading up by 21 points. While BSE Mid Cap is trading up by 0.35%, BSE Small Cap index is trading up by 0.29%. The rupee is trading at 55.52 to the US dollar.

Majority of the energy stocks are trading in the green with Essar Oil and Castrol being the biggest gainers. As per a leading financial daily, Bharat Petroleum Corporation Ltd (BPCL) is gearing itself up for the de-regulation in the retail segment of diesel that is still being subsidized. The de-regulation is expected to attract private players in the segment, which already has the likes of Reliance and Essar, and increase the level of competition. BPCL is strengthening its critical infrastructure such as pipelines to reduce distribution costs. The company is expanding its capacity at the Kochi refinery and the pipeline to Karur is being extended to Bangalore. Similarly, the Kota network is being further extended 300 km to Jobner in Rajasthan. The company is setting up an LPG pipeline from Kochi to Coimbatore. The company is also working on enhancing the retail experience through service standards and convenient location of outlets in order to increase sales. BPCL stock is currently up 1.3%.

Domestic pharma stocks are trading mixed with, Lupin Ltd and Elder Pharma leading the gainers while Wockhardt Ltd and Glenmark Pharma are the major losers. As per a leading business daily, Glenmark has recalled batches of three of its drugs from the US market due to problems with respect to odour. These drugs are Gabapentin, Pravastatin Sodium and Topiramate in various strengths. The problem has been at the bottle supplier's end whose services have now been terminated. The US FDA has labeled this as Class III which means that it is a situation in which use of or exposure to a violative product is not likely to cause adverse health consequences. Glenmark does not expect this recall to have any significant implications on the financial front. It must be noted that in recent times the US FDA has become very stringent with respect to adhering to good manufacturing practices. Many Indian companies in the recent past have come under its scanner for not complying with these practices. In Glenmark's case this is a voluntary recall and the company faced a similar situation early this year when it recalled multiple lots of its Montelukast Sodium Tablets. Glenmark stock is trading down 4.2%.