Indian markets open firm

Mon, 26 Oct 09:30 am

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The major Asian stock markets have opened the day on an encouraging note with the stock markets in Japan (up 1.1%)and China (up 0.7%), being leading gainers in the pack. The major stock indices in Europe and US too ended their previous session on a positive note. The rupee is trading at 64.83 per US dollar.

Back home, the Indian stock markets have opened the day on a firm note. BSE-Sensex is trading higher by 102 points (up 0.4%) and NSE-Nifty is trading higher by 30 points (up 0.4%). Both S&P BSE Midcap and S&P BSE Smallcap stocks have opened in green. Both the indices are trading higher by 0.1% and 0.3% respectively. Major sectoral indices have opened the day on a positive note. Stocks from metal & mining and automobile sectors are witnessing maximum demand.

As reported in a financial daily, tractor sales of various auto companies have declined sharply for the first half of the current fiscal. The sales have plummeted by 20% for the said period. Reportedly, a second straight year of week deficient rainfall have lead to lower disposable income in the hands of farmers. Further, lower than expected increase in the minimum support prices for the crops also affected the income of the farmers. These factors have led to poor demand of the tractors.

Reportedly, some companies like Escorts Ltd, have also put hold on their expansion plans. The company's sales in the domestic market declined by 17.7% to 25842 units in the six months ended 30th September.

Not only tractors but even motorcycle sales have been hit by the slump in the rural income. As per the data published by Society of Indian Automobile Manufacturers (SIAM), sales of motorcycles declined by 4.06% to 5.36 m units in the six months ended 30th September.

Cheaper motorcycles with an engine displacement of 100cc to 110cc were the worst affected. Reportedly six out of ten motorcycles are from the above category. Hero Motocorp which has considerable exposure to the rural market reported a decline of 8% in sales for the quarter ended 30th Septemeber on a YoY basis.

As per a financial daily, Glenmark has signed an agreement with Celon Pharma of Poland. The deal is in relation to developing and marketing of Glenmark's dry powder inhaler 'Seritide' in Europe. Seritide is used for the treatment of chronic obstructive pulmonary disease. As reported by an article in leading financial daily, Seritide is among the top three brands in Europe accounting for sales of US$ 2.24 bn. The agreement has been signed for a period of 10 years with an option of a 2 year extension. The agreement will allow the company to expand its respiratory business in the European market.

Many Indian pharma companies have been undergoing trials to enter into the respiratory segment in the international markets. Companies like Cipla Ltd, Lupin and others are too developing pipeline in this space. However, given the high entry barriers> in this segment, only few companies will be successful.