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Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
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Auto Stocks Least Favoured
Thu, 14 Jan 01:30 pm

The Indian markets shed their morning losses, moving marginally above the dotted line in the afternoon session. Sectoral indices are trading on a mixed note with stocks from the auto and realty sectors bearing the maximum brunt. IT stocks are leading the gains.

The BSE Sensex is trading up by 72 points (0.3%) while the NSE Nifty is trading up by 14 points (0.2%). The BSE Mid Cap index is trading lower by 0.4% while the BSE Small Cap index is trading down by 0.3%. Gold prices, per 10 grams, are trading at Rs 25,841 levels. Silver price, per kilogram, is trading at Rs 34,056 levels. Crude oil is trading at Rs 2,078 per barrel. The rupee is trading at 67.05 to the US$.

Energy stocks are trading on a mixed note with MRPL and HPCL witnessing maximum buying interest. As per a leading financial daily, Oil and Natural Gas Corporation (ONGC) has cut its capital spending plan by 15% for the current fiscal year. The same is done as some of its projects are being delayed amid global oil collapse that is hurting producers.

The decision came in after the company's board approved a cut in capex to Rs 314 billion from the earlier estimated amount of Rs 362 billion for the current financial year (FY16). Further, the expenditure is also said to fall further to levels of Rs 293 billion in 2016-17 (FY17). The management of the company stated that falling cost of oilfield services and materials will significantly reduce costs for the company during the next year when several contracts are lined up for renewal.

Most of the oil producers across the globe are reworking their capital expenditure plans and deferring their projects. All of these developments are being carried out because of the falling oil prices. Crude oil has topped the losses in the commodity markets. And the downtrend is further fueled with the recent tumult in China which created many concerns in the commodity markets.

As Vivek Kaul states in one of his recent articles, "China is a major consumer of commodities and any economic slowdown in China, will lead to a fall in commodity demand. This isn't good news for many commodity exporting countries in particular and global economic growth in general." The article also shares many views on the recent currency war led by the yuan devaluation and how can it affect the global economic growth. You can read it here.

Also for ONGC, the sharp fall in oil and gas prices has forced the company to rework the capex for its key KG-DWN-98/2 field that appears unviable in today's environment. For that, the company is trying to reduce its cost estimates and is seeking government assistance to make the project work. The stock of ONGC is presently trading down by 0.7% on the BSE.

Stocks in the pharma space are also trading on a mixed note with Elder Pharma and Natco Pharma leading the losses. As per an article in Business Standard, Cipla is banking on over 200 drugs under development. Out of these, the top 50 projects are said to have potential of over US$ 30 billion. The company stated that these top 50 projects include therapeutic areas of respiratory, oncology, antiretroviral and others with 20 in solid oral form of delivery, 13 injectibles, 12 inhalation and five in other delivery forms.

Further, the homegrown drug major is also eyeing to grow share of its North American business to overall sales to up to 25% by 2020 from the current reading of 8%. The same will be said on the back of the company's intensified focus on R&D and filing for more approvals of generic drugs in the US. The company plans to maintain momentum of filing 10 to 15 abbreviated new drug applications (ANDAs) per year and emphasize on limited competition opportunities in the industry. Currently the stock of Cipla is trading marginally lower.

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