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Volatility plagues Indian indices 
(Fri, 23 Nov Closing) 
Indian equity markets had a volatile trading session today. The indices began the day's proceedings on a cautious note and the morning session saw them hovering around the breakeven mark. Towards noon, selling pressure intensified across index heavyweights and pushed the indices deep into the red. The final trading hour did see the indices recoup considerable chunk of their losses although it was not enough to push them above the dotted line. While the Sensex today closed lower by 11 points, the NSE-Nifty today closed lower by 1 point. Both the BSE Mid Cap and the BSE Small Cap, however, bucked the trend and closed marginally into the positive. Losses were largely seen in banking and metal stocks.

As regards global markets, Asian indices closed mixed today while European indices have also opened on a mixed note. The rupee was trading at Rs 55.48 to the dollar at the time of writing.

Pharma stocks closed mixed today. While Dr.Reddy's and Sun Pharma found favour, Ranbaxy closed in the red. Problems for Ranbaxy on the manufacturing front do not seem to end. As per a leading business daily, the company has recalled the drug 'Atorvastatin', generic version of Pfizer's 'Lipitor' from the US. The recall will temporarily disrupt supplies of Atorvastatin in the US market while it conducts an investigation. It must be noted that Ranbaxy was the first-to-file (FTF) on this drug and had garnered the 180-day exclusivity for it once the patent on the drug expired. This enabled the company to generate sales to the tune of almost US$ 600 m from the drug in the US during the first 6 months. At the same time, Ranbaxy has had many problems in the past with the US FDA when the latter found it violating manufacturing norms at two of its plants in India. Earlier this year, Ranbaxy had agreed to make broader changes at its plants and agreed to appoint an external auditor to resolve the matter. Although Ranbaxy expects the investigation to be completed within 2 weeks after which it expects supplies of Atorvastatin to resume, this recall is bound to have some impact on the reputation of the company.

Most auto stocks closed firm today with the key gainers being Ashok Leyland, Tata Motors and Hero Motocorp. As per a leading business daily, Tata Motors expects the Indian auto industry to grow at 6-7% in FY13 as against 9-10% in FY12. This is not surprising given that the industry in the fiscal so far has been impacted on account of the slowdown in the economy, firm interest rates and higher fuel prices all of which have taken its toll on demand. Indeed, as per SIAM, during the month of April-October 2012, the passenger vehicles segment grew at 10.5% YoY, while commercial vehicles and two-wheelers grew by 4.3% YoY and 4.5% YoY respectively. In the passenger vehicles segment, utility vehicles (UVs) were the star performers as volumes of this segment grew by a stupendous 60% YoY during the period. That said, most companies reported strong growth in October 2012 on account of the festive season. Production reaching full capacity at Maruti's plant at Manesar also propped up October sales.
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