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Weak opening for Indian stock markets
Mon, 5 Mar 09:30 am

Asian stock markets have opened the day on a weak note. Stock markets in Hong Kong (down 0.9%), Indonesia (down 0.2%) and Japan (down 0.2%) are in the red. However, markets in Malaysia (up 0.2%) have opened in the green. The Indian stock markets have opened the day on a weak note. Stocks in the banking and consumer durables space are leading the losses.

The BSE-Sensex is trading down by 132 points (0.7%) and the NSE-Nifty is down by around 47 points (0.9%). Mid cap and small cap stocks are trading in the red as well, with the BSE Mid cap and BSE Small cap indices down by 0.2% and 0.1% respectively. The rupee is trading at 49.75 to the US dollar.

Pharma stocks have opened the day on a weak note with Ranbaxy and Cipla India in the red. Novartis India will have its final chance to protect its patent for anti-cancer drug. The Supreme Court will hear the case for Glivec, Novartis' anti-cancer drug, later this month. This ruling is expected to have a significant impact on all the pharma innovators. Novartis' Glivec is a major medical breakthrough of the 20th century; however it has been replicated with minor process adjustments by many other pharma companies in India. These companies sell the drug at significant discount when compared to that of Novartis.

Banking stocks have opened the day on a subdued note with IDBI Bank and Axis Bank leading the losses. Public sector lender IDBI Bank is planning to raise an amount of up to Rs 52.9 bn. This would be done through various means, including share sale to government and Life Insurance Corporation of India (LIC). The Tier 1 bonds held by the Government of India in the bank will be converted into preferential equity shares. The bank's board has fixed the issue price of preferential shares at Rs 112.99 per share. It will issue 188.5 m equity shares of face value Rs 10 each at this fixed price of Rs 112.99 per share; the aggregate amount will be Rs 21.3 bn. Also, IDBI would issue up to 221.2 m shares at a price of Rs 112.99 per share to the government, which will amount to Rs 25 bn. In addition, the bank would issue up to 58.6 m equity shares at the same price of Rs 112.99 per share to LIC. This will aggregate to about Rs 6.6 bn.

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