Sustained buying saves the day

Wed, 9 Jun Closing

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   09:30 am   

   11:30 am   

   01:30 pm   

After a cautious start in the morning, Indian indices slowly gained strength as the day progressed only to be subject to another round of profit booking. However, sustained buying at lower levels ensured that the indices stayed well above the dotted line and closed in the green. While the BSE Sensex closed higher by around 65 points (up 0.4%), the NSE Nifty gained around 13 points (up 0.3%). The BSE Midcap and BSE Smallcap also notched gains of 0.5% and 0.3% respectively. While gains were seen in metals and oil & gas stocks, IT and FMCG stocks were at the receiving end.

As regards global markets, Asian indices closed mixed today while the European indices have also opened on a mixed note. The rupee was trading at Rs 47.07 to the dollar at the time of writing.

As per a leading business daily, Ranbaxy has launched the generic version of Pfizer's 'Lipitor' ('Atorvastatin') in South Africa. Ranbaxy would be the first company to launch this product in the South African market. The company will sell the drug in strengths of 10 mg, 20 mg, 40 mg and 80 mg under the brand 'Lipogen'. At present, the market size of 'Atorvastatin' in South Africa is estimated at US$ 26 m. Globally, 'Lipitor' has annual sales of about US$ 13 bn. It must be noted that in 2008 Ranbaxy and Pfizer had entered into an out-of-court settlement to launch generic versions of 'Lipitor' on different dates in several countries. Ranbaxy has already launched the drug in Canada and is expected to launch it in the US (the biggest market) in late 2011. This is a positive for the company and will enable it to enhance its revenues and profits going forward. For the US launch to happen successfully, the company will have to ensure that there are no more problems with the US FDA. The stock closed higher by 1%.

Auto stocks closed mixed. While M&M and Maruti found favour, Tata Motors and Hero Honda closed in the red. FY10 was a buoyant year for the Indian auto sector as sales grew handsomely backed by rise in volumes. FY11 so far is turning out to be a good year as well. The May sales volumes figures are out and India's domestic car sales grew by a healthy 30% YoY. This increase has been attributed to rising incomes and a rapidly expanding economy that has offset the impact of price increases. Further, sales of trucks and buses, which is a good indicator of economic activity, grew by 58% YoY. Having said that, it remains to be seen whether this buoyancy can be sustained for many more months going forward. Meanwhile, concerns remain with respect to rising input costs.

Unemployment right now may be raging high in the US, but prospects in India seem a lot brighter. Infact it is expected that the country's job market is likely to return to pre-slowdown days in the third quarter of this fiscal. Demand for goods and services has been increasing due to the rise in consumer spending. And so employers are gearing up to hire more talent to capitalise on this optimism. According to a survey conducted by Manpower Inc. and published in a leading business daily, Indian employers report the most optimistic forecast among all 36 countries participating in the survey. Further, the hiring is expected to be strongest in the mining and construction industry. But the employment outlook is still subdued in the finance, insurance and real estate sectors. Overall, India has already been recording a strong growth in GDP. This trend is expected to continue in the coming months as well. Little wonder then that there is increasing optimism in the jobs market.