Indian stock markets defy Asian cues

Tue, 19 Jul 09:30 am

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Asian stock markets have opened the day on a weak note. Benchmark indices in Indonesia (down 0.6%), China (down 0.5%) and Hong Kong (down 0.3%) are trading in the red. However, stock markets in Singapore are trading in the green. The Indian stock markets have opened the day on a positive note. Stocks in the consumer goods (FMCG) and technology (IT) are leading the gains.

The BSE-Sensex is trading up by 37 points (0.2%) and the NSE-Nifty is up by around 14 points (0.3%). Midcap and small cap stocks are trading in the green as well, with the BSE Midcap and BSE Small cap indices up by 0.25% and 0.5% respectively. The rupee is trading at 44.54 to the US dollar.

Pharma stocks have opened the day on a mixed note with Cadila Health and Biocon trading in the green. On the other hand stocks of Glenmark Pharm and IPCA Labs are trading in the red. Pharmaceutical major, Glenmark Pharmaceuticals Ltd has stated that its subsidiary, Glenmark Generics has received the final approval for Abbreviated New Drug Application (ANDA) by the US Food and Drug Administration (US FDA) for Nizatidine capsules. Nizatidine capsules are the generic version of Axid brand which belong to SmithKline Beecham Corporation. This drug provides treatment for gastric and active duodenal ulcer. It blocks one of the chemicals named histamine that stimulates the production of stomach acid. The company said that they will immediately start the marketing of the said product in the US market. Glenmark's current portfolio consists of 70 products authorized for distribution in the US marketplace and 40 ANDA's pending approval with the USFDA.

Banking stocks have opened the day on a good note with Bank of Baroda, Indusind Bank and Kotak Mahindra Bank leading the gains. The banking industry has hinted that they do not expect any major interest hikes by the Reserve Bank of India (RBI). The RBI has hiked interest rates by nine times in one year to control the runaway inflation. However, the banks have been negatively impacted as they have seen credit growth slowdown. As per Bank of India (BOI), credit growth during the quarter ended June 2011 was just 3.7% as compared to the 5% seen during the same period last year. As per the Chairman of the Indian Banking Association, the number of proposals particularly from the infrastructure sector has witnessed a slowdown in the recent months. As a result, the banks have sought a pause in the interest rate hikes to give time for the demand to stabilize again. However, whether the apex bank would comply with this request or not is something that remains to be seen.