Selling pressure takes toll

Mon, 27 Aug Closing

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Indian equity markets began the day's proceedings on a cautious note today and gradually moved deeper into the red on the back of relentless selling pressure across heavyweights. There was no respite in the final trading hour as well and the indices closed below the dotted line. While the Sensex today closed lower by 104 points, the NSE-Nifty today closed lower by 36 points. The BSE Mid Cap and the BSE Small Cap were not spared either as they closed lower by 1% each. Losses were largely seen in banking, metals and IT stocks.

As regards global markets, Asian indices closed mixed today while European indices have also opened mixed. The rupee was trading at Rs 55.64 to the dollar at the time of writing.

Steel stocks closed weak today with the key losers being Tata Steel and Steel Authority of India (SAIL). As per a leading business daily, Tata Steel has increased its investments in Canada and France. Tata Steel Minerals Canada, a joint venture between New Millennium Iron (NM) and Tata Steel, is planning to invest US$ 12.8 m in a new multi-user dock facility in Quebec's Port of Sept Iles. This investment is being done enhance EU iron ore shipments. Further the company is also looking to invest in new technology so it can produce longer wear-resistant rails at its French steel mill. With this, Tata Steel has invested almost EUR 50 m in the facility over the last three years. It must be noted that in 1QFY13, European revenue was at Rs 204 bn (3% increase QoQ) with steel sale deliveries at 3.2 mt (down 10% QoQ). Corus EBITDA/ton surprised positively at US$ 35/ton (US$ 7/ton in 4QFY12) with Corus EBITDA at Rs 6.2 bn. The management expects 2HFY13 to be better operationally as various cost reduction initiatives and restructuring efforts start to pay off.

As per a leading business daily, Cadila Healthcare has concluded the agreement to re-launch KINLYTIC (Urokinase) in North America with Microbix Biosystems. Both companies are now working towards regulatory approval expected by late 2014. As per the terms of the agreement, Microbix has licensed to Zydus Cadila all its rights and expertise related to KINLYTIC drug. Hence, Cadila Healthcare will now make investments for regulatory procedures, product development, manufacturing and marketing. Microbix will receive significant royalties on all sales of KINLYTIC, plus a multi-million dollar milestone payment when Zydus Cadila achieves US$ 100 m in annual sales. KINLYTIC injection is used to dissolve blood clots that have formed in the lungs. It is an enzyme produced by the kidney. The product was first approved in 1978 but was unavailable since 2009 due to lack of an approved manufacturing facility. In 2008, Microbix acquired all rights to KINLYTIC and has been working to re-introduce the drug since then. For Cadila Healthcare, this alliance is a part of its strategy to broaden its critical care portfolio. The stock closed higher today.