Indian markets end flat

Tue, 3 Nov Closing

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After opening the day on a firm note, Indian equity markets eroded their gains as the day progressed to finally close flat. While the BSE-Sensex closed higher by 32 points, the NSE-Nifty closed higher by 10 points. S&P BSE Midcap and the S&P BSE Smallcap indices closed on a positive note. IT, oil and gas and power sectors led the pack of gainers.

Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 0.89%, while the Nikkei 225 led the Shanghai Composite lower. They fell 2.10% and 0.25% respectively. European markets are lower today with shares in Germany off the most. The DAX is down 0.16% while France's CAC 40 is off 0.08% and London's FTSE 100 is lower by 0.02%. They are down 0.29% and 0.14% respectively. The rupee was trading at 65.45 against the US$ in the afternoon session.

Shares of Sun Pharmaceuticals finished the trading day in green after it was reported that the company had completed the acquisition of US-based eye care company InSite Vision Inc. through one of its indirect wholly-owned subsidiaries Thea Acquisition Corp. The acquisition was completed by means of a short-form merger under Delaware law. Post the short-form merger, InSite has become an indirect wholly owned subsidiary of Sun Pharma.

Reportedly, Thea had completed the tender offer for all the issued and outstanding common stock of InSite Vision last month. The company made a tender offer at a price of US$0.35 per share in cash, a 30% premium to the implied price per share in a deal worth US$48 million.

InSite Vision focuses on developing new specialty ophthalmic products, including three late-stage programmes. Sun Pharma aims to grow its ophthalmic business in the US through acquisitions of InSite Vision.

Buying was witnessed across majority of the Energy stocks with Chennai Petroleum and Petronet LNG leading the gains. According to a leading financial daily, PSU refiner Hindustan Petroleum Corp Ltd (HPCL) and gas utility GAIL India Ltd are planning to set up a multi-billion dollar petrochemical plant in Andhra Pradesh. Reportedly, GAIL is taking the lead in doing the feasibility studies as well as site selections and is leading the project as it has expertise in building and operating gas-based petrochemical plants. The companies are exploring the possibility of a petrochemical project after their plans to team up with France's Total, Lakshmi N Mittal Group and Oil India Ltd (OIL) for a 15 million tons a year refinery-cum-petrochemical plant at Visakhapatnam in Andhra Pradesh fell through. The petrochemical plant will use natural gas as a feedstock.

Public sector oil marketing companies were the examples of wasted potential due to poor government policies until a few years ago as these companies had to sell petroleum products at fixed prices irrespective of input oil costs. But since 2014, deregulation of diesel and gasoline has boosted the financial profile of these companies. Not just earnings, but balance sheets as well. With correction in oil price, the under recovery burden has come down. Net under recoveries have reduced to nil. In our recent editions of ‘5 Minute Wrap Up’, we highlight the 0key oil marketing companies that have witnessed double digit gains in stock prices.