Markets start on a positive note

Fri, 18 Jun 09:30 am

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The Indian markets have started today's session on a positive note. The benchmark indices opened at the breakeven mark but soon moved into the positive territory. They have managed to make further inroads into the green since then. Other key Asian markets are in the green with Indonesia (up 1.1%) leading the pack of gainers. The US markets closed higher by 0.2% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading strong with software and energy majors finding investors' favour. The BSE-Sensex is trading higher by around 90 points, while the NSE-Nifty is up by about 20 points. Buying interest is also being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.4% and 0.3% respectively. The rupee is trading at 46.18 to the US dollar.

Pharma stocks have opened the day on a positive note. Gainers here include Torrent Pharma and Piramal Healthcare. As per a leading business daily, Ranbaxy may close down one of its biggest global bulk drug production units at Mohali. In fact, the plant may be closed as early as December this year. The company is already sourcing few products made at the facility from local drug-makers ahead of the closure. Recently, Chandigarh based Parabolic Drugs said it has bagged a contract to make two key bulk drugs for Ranbaxy. One of the products is the advanced antibiotics cephalosporin that is manufactured at Mohali. Cephalosporin is the company's best selling prescription drug sold under the brand Sporidex.

Ranbaxy has two production units in Mohali, one making bulk drugs and the other churning out formulation medicines. It is the bulk drug facility that is in question. The decision has apparently been trigged due to local residents objecting to the location of the plant over pollution and environmental issues. However, the company says that the facility complies fully with all environmental regulations and that it enjoys a healthy relationship with the community in and around the plant.

Paint stocks have opened the day on a positive note. Gainers here include Asian Paints and Kansai Nerolac. As per a leading business daily, Kansai Nerolac plans to invest Rs 4 bn over the next two years to augment the production capacity of its Hosur plant by 20%. The current capacity of the plant is around 15,000 tonnes. The company has a market share of 42% and 13% in industrial paints and decorative paints respectively. It increased its prices by 4% in May and might increase it by 3% by July. It may be noted that paint manufacturers across India had increased prices recently due to an increase in excise duty, coupled with a rise in raw material prices. Kansai Nerolac posted a 70% YoY increase in net profit in FY10.