Indian equity markets remain lackluster

Mon, 29 Sep 11:30 am

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After opening flat, Indian Indices have continued to hover around the dotted line during the morning trading session. Sectoral indices are trading mixed with stocks from metal and FMCG sectors witnessing maximum selling pressures while stocks from healthcare and IT sector are in demand today.

The BSE-Sensex is trading up by 1 point. The NSE-Nifty is trading down 3 points. Both midcap and small cap stocks are in demand today. The BSE Mid Cap index is trading up by 0.89% and the BSE Small Cap index is trading up by 1.51%. The rupee is trading at 61.57 to the US dollar.

Indian pharma stocks are trading strong today with Indoco remedies and Aurobindo pharma being the leading gainers in the pack. As per the financial daily, the united states drugs and food regulator (USFDA) has issued some 483s on the Gujarat unit at Halol. Recently USFDA had made a surprise visit on this facility. Submission of Form 483 means the FDA regulators have found certain procedural issues with respect to the plant's running and seeks corrective actions. The company can continue to manufacture and export it drugs. However, there can be some delay in drug approvals. Reportedly, the FDA team has made 23 observations. Of which four are for injectable units, the other four for oral solid unit and rest are the quality-control lab issues. Sun pharma generates approx 60% revenues from US of approx 25% is from this facility. Thus this is an important revenue contributor to Sun's topline. Reportedly, no data integrity issues were observed this is a positive sign. The company will be now working with the USFDA to clear these observations. However, since USFDA has become quite stringent, any negative development on this front can impact the company's growth.

Telecom stocks are trading mixed today. While Reliance Communications is leading the gainers; Tata Teleservices is leading the losers. As per a leading financial daily, India's largest telco, Bharti Airtel will have a new partner in its Bharti Hexacom joint venture (JV). The existing JV between Bharti and the Telecommunication Consultants of India (TCIL), a central government PSU will end later this year. The PSU is looking to exit the JV and has asked SBI Capital Markets to arrive at a valuation for the same. Bharti holds a 70% stake in the Hexacom JV while TCIL holds the remaining 30%. Bharti Hexacom offers telecom services in Rajasthan and six states in the north east (excluding Assam). TCIL is looking to exit as it needs to raise cash after its disinvestment plans was put on hold by the Telecom Commission. Bharti Airtel was trading down 0.6% at the time of writing.