The Indian markets have started today's session on a weak note. The benchmark indices opened way below the breakeven mark and have not managed to recoup the losses since then. Other key Asian markets are trading a mixed bag with Hong Kong (up 1%) leading the pack of gainers. However, the Malaysian market is down 1%. The US markets closed marginally lower yesterday.
Currently in India, heavyweights from the BSE-Sensex are trading in the red with banking and metal stocks facing the brunt of selling activity. The BSE-Sensex is trading lower by around 200 points, while the NSE-Nifty is down by about 55 points. Selling is also being witnessed among mid and small-cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading lower by 0.7% and 0.6% respectively. The rupee is trading at 45.86 to the US dollar.
Telecom stocks have opened the day on a weak note. Losers here include Idea Cellular and Bharti Airtel. As per a leading business daily, Bharti has invited bids to outsource the management of its inter-city optic fibre cable network which stretches more than 120,000 km. The network carries voice and data signals between cities. The company plans to finalise the US$ 1 bn 5-year deal within the next two months. Bharti will form a joint venture with the awardee and will retain a stake in it. The company is also set to renew its multi-billion network-outsourcing contracts with Ericsson and Nokia Siemens this year.
Interestingly, state owned BSNL also plans to outsource the management of its fibre optic cable network. However, it has to worry about resistance from labour unions. In our view, Bharti will go ahead with its outsourcing plans given its knack and track record of focusing on functions it knows best.
Pharma stocks have opened the day on a mixed note. Gainers here include Cadila Healthcare and Elder Pharma. Indoco Remedies is the red. As per a leading business daily, Biocon, through its clinical services arm Clinigene is exploring a tie up with a clinical research organisation SIRO Clinpharm. It will help the companies offer complimentary services. While Biocon has a human pharmacology unit, SIRO has data management services. Biocon has two subsidiaries, Syngene and Clinigene, which are involved in custom research and clinical research respectively. Syngene contributes about 12% to the total consolidated revenues of the company, while Clinigene still does not contribute significantly. While the former is strong in molecular biology, synthetic chemistry and custom synthesis, the latter has developed capabilities in clinical R&D through clinical trials. In our view, this is a positive development given SIRO's expertise in conducting phase III and phase II clinical trials and its alliances with several overseas clinical research organisations in the past two years.