Software stocks lead markets lower

Tue, 10 Aug 09:30 am

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The Indian markets have started today's session on a negative note. The benchmark indices opened below the breakeven mark and have stayed in the negative territory. Other key Asian markets are in the red with China (down 0.8%) leading the pack of losers. The US markets closed higher by 0.4% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading weak with software majors facing the brunt of selling activity. The BSE-Sensex is trading lower by around 40 points, while the NSE-Nifty is down by about 15 points. However, buying interest is being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.3% and 0.2% 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 Wockhardt and Elder Pharma. As per a leading business daily, Glenmark Pharma has entered into an agreement with US based Sepracor, which could the pave way for launching generic eszopiclone tablets in the US market. The drug is used in treating insomnia. Sepracor had sales of US$ 741 m in FY10 from the drug. The agreement will resolve a patent infringement suit related to the filing of an abbreviated new drug application (ANDA) with the US Food and Drug Administration to market generic eszopiclone tablets. Under the agreement, there are two possible timelines for Glenmark to launch its generic version of the drug. The first is November 30, 2013, which is two and half months prior to the expiry of Sepracor's US patent. The second is May 30, 2014 if Sepracor obtains pediatric exclusivity for the drug. Pediatric exclusivity is an add-on to an existing marketing exclusivity or patent protection. The agreement is subject to approval of US courts.

Food stocks have opened the day on a strong note. Gainers here include VST Industries and Nestle. As per a leading business daily, Britannia plans to enter Saudi Arabia in a bid to increase market share in West Asia. The company is likely to use the country as a launch pad to look at African countries like Nigeria, Angola and Ghana. It may be noted that the company has acquired two companies in the West Asia in Sohar and Dubai. In the long run it is a good geography to have a footprint in given the growing base of young population in the region. Given that the biscuit industry has not been able to pass on the cost increase to the consumer, this move reflects an effort to push volumes growth.