Indian equity markets remain in red

Wed, 12 Jun 11:30 am

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Indian equity markets have remained in red during the previous two hours of trade. oil and gas and healthcare sectors are leading the gains while metals and consumer durables are facing the maximum selling pressures.

The BSE-Sensex is down by 95 points and NSE-Nifty is down by 26 points. BSE Mid Cap index is down by 0.3% while BSE Small Cap index is down by 0.1%. The rupee is trading at 56.32 to the US dollar.

IT shares are trading on a mixed note with Info Edge and Mahindra Satyam leading the gains while TCS and Moser-Baer India are leading the losses. According to a leading financial news daily, India's second largest software exporter, Infosys has hired executive search firm, Egon Zehnder to identify and shortlist possible external candidates on a global basis, who can be considered for the position of chief executive officer. While it does not necessarily imply that an outsider would be appointed as the next CEO, it does highlight the fact that there has been a change in mindset at Infosys. Infosys has been recently drawing a lot of criticism from the investor community on account of its share price underperformance. While a part of that is attributable to the change in strategy adopted by the company, i.e. to focus more on value-added services rather than plain-vanilla application development and maintenance, a part of the underperformance can also be attributed to rapid changes in top management that has happened in quick succession. On June 1, in an unusual move, the Bangalore based company recalled retired co-founder NR Narayana Murthy as the executive chairman for five years. Infosys' share is trading up by 0.7%.

Indian Pharma shares are trading on a mixed note with IPCA Labs and Glenmark Pharma leading the gains while Dishman Pharma and Wockhardt Ltd are facing the maximum selling pressures. According to a leading financial news daily, Government of India has banned the sale of analgesic drug Dextropropoxyphene that is used as a painkiller mostly in combination with Paracetamol or Dicyclomine in a number of drug brands including Wockhardt's Proxyvon and Ranbaxy's Sudhinol. The government is of the opinion that the use of the aforesaid drug and formulations containing the aforesaid drug is likely to involve risk to human beings. In India, this drug registers over Rs 700 m of sale and is marketed by over a dozen players. Drug brands likely to get affected by the ruling include Wockhardt's Proxyvon and Spasmo-Proxyvon, Ranbaxy Lab's Sudhino, Lupin's Lupivon and Wallace's Walagesic. The drug was taken off from the US market in 2010 for serious side effects related to heart and risk of fatal overdose. The UK and some other European markets banned it between 2007 and 2009.