Indian stock markets slide further

Wed, 7 Aug 11:30 am

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After the big correction yesterday, Indian share markets have continued to weaken further in the last two hours of trade. The sectoral indices are trading mixed with stocks in FMCG and capital goods sectors leading the losers. Realty and PSU indices have shown some strength and are trading higher.

The BSE Sensex is down by 67 points and the NSE-Nifty is down by 20 points. BSE Mid Cap index and BSE Small Cap index are up by 0.18% and 0.28% respectively. The rupee was trading at 61.3 to the US dollar at the time of writing.

Indian pharmaceutical stocks are trading on a mixed note with Strides Arcolab and Orchid Chemicals leading the gains; while Dishman Pharma and Wockhardt Ltd are leading the losses.According to a leading business daily, top officials in the pharmaceuticals department will meet drug manufacturers today. The meeting is to discuss the concerns over implementing the new drug price control order (DPCO).

According to DPCO of 2013, it has become mandatory for drug manufacturers to sport revised price labels on essential medicines within 45 days of the notification. The notification includes slashing prices of about 348 medicines. The drug makers have complained about the logistical and several other issues they will face in implementing the new drug prices with in such a short period of time. Also, companies like Cipla, Sun Pharma and Lupin have approached the court against the new order. The meeting is to discuss the problems and arrive at possible solutions so that the companies can swiftly adapt to the new pricing regime.

PSU stocks are trading in the green today with Metals and Minerals Trading Corporation of India (MMTC) and Oil India Ltd (OIL) leading the gains. OIL recently announced that it plans to invest Rs 120 bn in the North East by 2017 on projects, including expansion of exploration work and diversification of business. OIL which has wind energy projects in Rajasthan plans to expand its presence in the sector by setting up units in the North East.

Meanwhile OIL, along with ONGC's overseas arm ONGC Videsh Ltd (OVL), is in talks with US' Anadarko Petroleum Corp for buying its 10% stake in Mozambique's giant Rovuma - 1 gas field, and if the negotiations are successful then the state-owned consortium may end up with 20% share in the reserve which has the potential to become one of the world's largest LNG producing areas by 2018. OVL-OIL last month had successfully finalised the deal to buy Videocon Industries' 10% stake in the same field. This field is estimated to hold as much as 65 trillion cubic feet (Tcf) of in place gas reserves, more than 10 times the reserves in Reliance Industries' eastern offshore KG-D6 fields.