Profit booking takes toll

Mon, 23 Sep 11:30 am

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   09:30 am   

   01:30 pm   

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After a weak start, the Indian stock markets have fallen further below the dotted line in the morning session. All sectoral indices except the IT index and the Consumer Durables index are trading lower.

The BSE-Sensex is down 270 points and the NSE-Nifty is trading down 90 points. The BSE Mid Cap index is trading down 0.7% and the BSE Small Cap Cap index is trading down 0.2% The Rupee is trading at 62.53 to the US Dollar.

Auto stocks are trading mixed today. Hero Motor Corp and TVS Motors are among the top gainers while Mahindra & Mahindra (M&M) and Maruti Suzuki are among the top losers. The government's decision to notify quadricycles as a new class of vehicles, has created differences among India's leading auto companies. The country's top automakers met the road transport and highways minister, Oscar Fernandes on Friday to arrive at a consensus on the issue. The industry seems to be divided into two camps. Some auto companies such as Tata Motors, Maruti Suzuki and TVS motors have maintained their opposition on introducing quadricycles on Indian roads, owing to issues regarding high emissions and safety features of quadricycles. On the other hand, Bajaj Auto, M&M, Piaggio and Eicher Motors are in favour of the move. Bajaj Auto has already developed India's first quadricycle, the RE-60.

The companies against the move say that introduction of quadricycles will lead to severe congestion on urban roads and will increase pollution levels. They also cite the safety of quadricycles as a major issue, arguing that vehicles on Indian roads adhere to about 47 safety regulations. The quadricycle meets only about 38. The companies in favour say that the move will lead to a more level playing field in the auto sector and will give a boost to the growth of the industry. They point out that the 4-wheeler version of the quadricycle will meet all safety and environmental norms. The government has said that it has heard all points of views and will take a decision on the issue next month.

Indian pharma stocks are trading mixed today. Dishman Pharma and Orchid Chemicals are leading the gainers; while Panacea Biotech and Glenmark Pharma are leading the pack of losers. Dr. Reddy's Laboratories (DRL) is down 1.5% today. According to a leading business daily, Genzyme Corporation; a subsidiary of Sanofi-Aventis has filed a suit against the company. Genzyme has alleged that DRL has infringed patents of the former's blockbuster cancer drug Mozobil.

In a petition filed in the District Court of Delaware, Genzyme stated that DRL intimated though a letter that it has submitted an Abbreviated New Drug Application (ANDA) with US FDA to seek approval for the commercial manufacture, importation, use, and sale of 20 mg/ml Plerixafor injection; which will be a generic version of Mozobil drug. However, Genzyme has claimed that DRL has submitted its Para IV application to obtain FDA approval much before the expiration of its three patents, listed in electronic orange book. One of the patents will expire on December 2018; while other two patents are expiring in July 2023. Mozobil contributes Euro 56 m in sales annually from the US geography.