Indian share markets widen losses

Wed, 23 Oct 01:30 pm

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Indian share markets continued to slip below the dotted line in the post-noon trading session. All the sectoral indices are trading in the red with realty, power and auto stocks being the biggest losers.

BSE-Sensex is down 250 points and NSE-Nifty is trading 74 points down. BSE Mid Cap is trading down 0.5% and BSE Small Cap index is trading down 0.6%. The rupee is trading at 61.5 to the US dollar.

Majority of the public sector bank stocks are trading in the green with Bank of India and Bank of Baroda being the major gainers. Only Indian Overseas Bank is trading in the red. As per a leading financial daily, the government has asked public-sector banks (PSB's) to improve their loan recovery mechanisms in light of rising bad loans in the banking system. The Finance Minister has directed PSB's to set up a separate vertical or division, headed by official of General Manager Rank, to oversee recovery of technically written-off accounts. As of June 2013, the total technical write-offs were around Rs 830 bn. The Finance Minister has urged public sector banks to focus on recovery of bad loans as every rupee so recovered would translate in to pure profit and also asked them to ensure that write-offs are not more than their recoveries. However for the quarter ended June 2013, six banks namely Indian Overseas Bank, Indian Bank, Bank of India, Bank of Maharashtra, Union Bank of India and Syndicate Bank, saw write-offs exceeding recoveries. According to the Finance Minister, large borrowers with borrowings of over Rs 10 m account for bulk of bad loans or Non Performing Assets (NPA) of banks.

Indian pharma stocks are trading mixed.  Orchid chemicals and Cipla are among leading gainers, while JB chemicals and Divis laboratories are top losers. Cadila healthcare has announced that the USFDA has given it green signal to initiate phase I clinical trials for a molecule to treat Type II diabetes. Company is working on the development of ZYDPLA1- a next generation long acting DPP-4 inhibitor. ZYDPLA1 is an orally active, new chemical entity (NCE) discovered and developed by Zydus research centre. The said molecule is a novel compound in the gliptin class of anti diabetic agents. The current available treatments for DPP-4 inhibitors are dosed once-daily. However, Zydus' molecule ZYDPLA1 has once a week dosing regimen. Thus this would provide diabetic patients with more convenient treatment alternative. Reportedly, Diabetes is one of the growing diseases. It is estimated that in 2025, nearly half of the world's diabetic population will be from emerging countries like, China, India, Russia, Brazil and Turkey. The sales of DPP-4 inhibitor class of drugs is expected to peak to $14 bn by 2022. Cadila was trading up by 0.9% at the time of writing.