Indian share markets open firm

Thu, 23 Aug 09:30 am

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Asian stock markets have opened the day on a firm note with stock markets in Hong Kong (up 0.9%), Singapore (up 0.5%) and Indonesia (up 0.3%) leading the gains in the region. The Indian share market indices have also opened the day on a firm note. Stocks in the metal and healthcare space are leading the gains. However, Auto and Oil and gas stocks are trading weak.

The Sensex today is up by around 47 points (0.3%), while the NSE-Nifty is up by around 15 points (0.3%). Mid and small cap stocks are also trading in the green with the BSE Mid Cap and BSE Small Cap indices up by around 0.5% and 0.3% respectively. The rupee is trading at Rs 55.25 to the US dollar.

Indian pharma stocks have opened the day on firm note with Dishman Pharma, Glenmark Pharma and Strides Arcolab leading the pack of gainers. As per a leading financial daily, Indian drug maker Ranbaxy Laboratories has agreed to withdraw 27 drug applications filed with the US Foods and Drug Administration (FDA). This is part of a deal to resolve long-pending regulatory issues over its two plants in India. Ranbaxy had signed a consent decree with the US authorities in January. Under this consent decree, Ranbaxy agreed to take a series of corrective measures and withdraw drug applications, which may contain fraudulent data. Most of the drugs for which the drug maker has withdrawn application are antibiotics, the biggest being anti-cholesterol drug Pravastatin. As per the FDA decree, Ranbaxy must never make another application for these withdrawn products and must never transfer these Abbreviated New Drug Applications (ANDAs) to a third party. It must be noted that in September 2008 the US FDA had banned 30 drugs made at the company's Dewas and Paonta Sahib plants for violating US drug manufacturing norms.

Power stocks have opened the day on a mixed note with Tata Power and JSW Energy trading firm. However, Reliance Power and National Thermal Power Corporation (NTPC) are facing selling pressure. Over the last few months, coal prices in the international markets have declined by about 25%. This has brought some relief to domestic thermal power producers in the form of lower production costs. As per an official of NTPC, India's largest thermal coal consumer, the decline in international coal prices have resulted in a decline in power production costs by 7-10 paise per unit. NTPC is passing on the benefit of lower production costs to its consumers, the state utilities. This in turn will benefit the ultimate users. It must be noted that Indonesian coal prices have dropped from US$ 100 per tonne freight-on-board in January to US$ 75. On the other hand, Australian coal with gross calorific value of 6,000 kilocalories/kg has declined from US$ 108 per tonne to US$ 88.