A listless end to the day

Mon, 2 Nov Closing

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After trading weak during post noon trading session, the Indian equity markets failed to gather momentum and closed the day on a negative note. While the BSE Sensex today closed lower by 98 points, the NSE- Nifty closed lower by 15 points. On the other hand, while the BSE Mid Cap index closed higher by 0.1%, the BSE Small Cap index closed lower by 0.2%. Metal stocks were the biggest losers today.

Asian stock markets finished sharply lower today with shares in Japan leading the region. The Nikkei 225 is down 2.1%, while China's Shanghai Composite is off 1.7% and Hong Kong's Hang Seng is lower by 1.19%. European markets are mixed. The DAX is higher by 0.59%, while the FTSE 100 is leading the CAC 40 lower. They are down 0.29% and 0.14% respectively. The rupee was trading weak at 65.47 against the US$ at the time of writing.

Power stocks languished in the red today with Torrent Power and KSK Energy bearing majority of the brunt. Power Grid Corporation of India (PGCIL) has reportedly been selected as the successful bidder under tariff based competitive bidding to establish transmission system for 'Strengthening of Transmission System beyond Vemagiri' Project on build, own, operate and maintain (BOOM) basis.

The transmission project comprising 765 kV & 400 kV, D/C transmission lines is to traverse the states of Andhra Pradesh, Telangana & Karnataka and include establishment of one 765/400 kV Substation in the state of Andhra Pradesh. The award of the project adds to the growing list of projects bagged by the company under tariff based competitive bidding route by competing alongside with the private sector majors.

India has made reasonable progress in adding power generation capacities. Previously the power plant units used to remain idle due to scarcity in the supply of coal. This constraint was eased by the government through auctioning of coal mines. However, the worst is hardly behind the sector given the sluggish demand from the State Electricity Boards (SEBs), the biggest buyers of electricity. In one of our recent editions of 'Today' Market', we outline the reform laid out by the government to kick-start power sector reforms in three states in order to bring efficiency in the Indian power sector.

Moving on to news from the healthcare sector. According to a leading financial daily, Dr. Reddy's Laboratories has launched Nise D spray for the treatment of pain. Through this product, the company is emphasizing its strategic intent of being a player of substance in the Indian OTC (Over The Counter) space and has further expanded its offerings in the therapeutic area of pain relief to consumers.

Reportedly, the market for pain relief products is approximately Rs 17 bn in India. Pain relief sprays are growing 20 times faster than creams and gels, indicating a trend of changing consumer preferences. The formulation for Nise D Spray comprises 3 key ingredients which get absorbed quicker, penetrate deep to reach the source of pain and reduce inflammation.

The scrip of Dr Reddy's Laboratories finished the trading day on an optimistic note (up 0.2%) on the BSE.

Mergers and acquisitions (M&A) activity in the pharma space have been on the rise of late. Tremendous pressure in the pharmaceutical industry has driven the consolidation. Both generic and innovator companies are facing growth challenges. For Indian pharmaceutical companies, the US and the domestic markets are the biggest and most important. So the actions of the regulatory bodies in these countries are of great interest to the Indian players. Read on more to know how generic pharma companies has been benefitting from global M&A activity.