Indian markets pare losses

Mon, 13 Oct 01:30 pm

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The Indian stock markets are trading marginally below the dotted line. In fact, the stock markets have pared losses in the previous two hours of trade led by sustained buying at lower levels. Entire broad markets are trading in the red today. Losers are being led by stocks from realty and pharma sectors while software stocks are leading the pack of gainers today.

The BSE-Sensex is trading down by 38 points and the NSE-Nifty is trading down by 2 points. Both The BSE Mid Cap index and BSE Small Cap indices are is trading down by 0.1% today. The rupee is trading at 61.24 to the US dollar.

Almost all mining stocks are trading on a firm note today, led by heavy buying in Hindustan Zinc and Coal India. As per a leading business daily, the country's largest coal miner Coal India, in a bid to improve productivity is planning to utilize existing underground resources/mines more efficiently as it has become difficult to operate new mines. This is on the back of hurdles involved in land acquisition and environmental clearances. It may be noted that mining from the underground mines costs more and is more challenging than that the opencast ones. Under Coal India's arm, 273 mines are underground and 164 are opencast, while some are mixed. As of now, an underground mine contributes only 8% to Coal India's total production, which has been on a steady fall since past few years. Alternately, production share for the underground mining for China is as high as 90%. The company is under pressure to improve the same and will explore mine-specific studies of its 90 underground mines. The stock is trading higher by 2% on the BSE today.

Most of the foreign pharma companies are trading in the red with Novartis and Abbott being major losers. As per a leading financial daily, the National Pharmaceutical Pricing authority (NPPA) has slapped a fine of Rs 3 bn on Novartis for overcharging consumers on sale of best selling painkiller medicine, Voveran. The company has also been served show cause notice to explain within two weeks why action should not be taken against it for overcharging. Voveran is based on diclofenac which was brought under the Price Control order along with 348 other medicines in May 2013. Companies such as Novartis, Cipla and GlaxoSmithKline Pharmaceuticals had contested the provisions of the new order and approached the court in July 2013. As per IMS Health annual data, Voveran clocked annual sales of Rs 2.25 bn and was among the top 10 brands in the domestic drug retail market as of April 2014. Voveran's market share has fallen since the new price control order became effective with its value growth falling by 14.5% from last year as per IMS data. Novartis stock is currently trading down 2.5%.