Banks drag Indian indices lower

Fri, 27 Sep 11:30 am

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After a good start, the Indian stock markets are trading below the dotted line in the morning session. Banking stocks are largely responsible for the fall as most sectoral indices are in the green.

The BSE-Sensex is down 60 points and the NSE-Nifty is trading down 18 points. The BSE Mid Cap index is trading up 0.5% and the BSE Small Cap index is trading up 0.7% The Rupee is trading at 61.84 to the US Dollar.

Most IT stocks are trading higher today. HCL Tech and Tech Mahindra are among the top gainers. For Indian IT companies, e-governance contracts represent a huge opportunity for growth. So far, such contracts have been a very small part of their business. However with the central and various state governments awarding more e-governance contracts recently, there is considerable interest being shown by IT firms. One such project has been mooted by the Kerala higher education department. This project entails improving the service delivery and transparency in governance of universities, collegiate education department and technical education department in the state. The aim is to provide faster delivery of services of high quality to all stakeholders in higher education sector.

For the initial phase, a sum of Rs 200 m has been allocated for this project. It will be scaled up later in a phased manner. Additional funds will also be provided by the universities themselves. A pre-bid meeting of software firms interested to participate in establishing the e-governance platform was held. As many as 16 major software companies, including Infosys has come forward to carry out this project. E-governance currently does not form a large part of revenues for Infosys but the company has indicated in the past that is looking at this space closely for opportunities. Infosys is trading up 0.4% today.

Indian pharma stocks are trading mixed today. Orchid Chemicals and Panacea Biotech are leading the gainers; while Wockhardt Ltd and Dr. Reddy's Laboratories (DRL) are leading the pack of losers.

DRL is trading 1% down today. The company has lost patent infringement suit against Sunovion Pharmaceuticals Inc. in USA. The drug in question is generic version of the sleep aid Lunesta.

Earlier in January 2013, a New Jersey federal judge had ruled that DRL did not infringe a patent for Lunesta; which belonged to Sunovion. At that time it was observed that generic version of Lunesta is chemically different and does not infringe the patent, which covers eszopiclone, the active ingredient in Lunesta. However, yesterday, the U.S. Court of Appeals for the Federal Circuit in Washington ruled out that the trial judge had erred in his ruling. The appeals court stated that DRL's generic version of Lunesta will indeed infringe a patent that expires next year.