Helping You Build Wealth With Honest Research
Since 1996. Try Now

MEMBER'S LOGIN

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Markets cautious after rate hike
Thu, 17 Mar 01:30 pm

After trading in a flat territory during the previous two hours of trade Indian stock markets have been cautious after the rate hike announced by RBI. Stocks from the consumer goods and consumer durables are trading strong, while those from the auto and IT space are trading weak.

Currently, the BSE-Sensex is down by 145 points while NSE-Nifty is trading 45 points below the dotted line. BSE Midcap and BSE Small cap indices are both down by 0.33% and 0.16% respectively.

In the mid-quarter policy review announced recently RBI has hiked key policy rates by 25 basis points (bps). Following the hike repo rate now stands at 6.75% while the reverse repo rate stands at 5.75%. However, CRR has been left unchanged at 6%. It may be noted that amidst rising inflation, RBI has hiked the interest rates for the eighth time since last March. Even in the last policy review, key rates were raised by 25 bps. While annual inflation for the month of February stood at 8.31%, food inflation continues to remain a worrisome factor as it has remained close to double digits. Considering the substantial rise in inflation the RBI has also raised March-end inflation forecast to 8% (from 7% earlier). However, the GDP growth forecast remains unchanged at 8.6%.

Indian pharmaceutical companies are trading mixed with Wockhardt and Biocon trading strong, whereas Dr. Reddy's and Cadila Healthcare are trading weak.  National Pharmaceutical Pricing Authority, the drug price regulator has allowed local pharmaceutical companies Wockhardt and Biocon to increase prices of their insulin brands due to rising input costs. These are the only 2 local pharmaceutical companies that make and sell insulin in India and their products are said to be a third cheaper than imported brands or those made from raw materials sourced from abroad. The drug price regulator increased the price cap of locally manufactured insulin by up to 18.55%. This follows the regulator's decision to raise the price cap on bulk drugs or ingredients used for making insulin by 16%. A marginally higher increase in insulin price is approved because of the rising conversion cost, packing charges, process loss and packing material. Wockhardt and Biocon's insulin brands will continue to be 18% cheaper than competing products despite the price increase. Both the Indian players account for a small market share of just 10% of the estimated Rs 2.5 bn insulin market.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Markets cautious after rate hike". Click here!

  
ABOUT EQUITYMASTER

Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.

PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
TRENDING TOPICS
FREE NEWSLETTERS
EQUITYMASTER SUPPORTS
  • HelpYourNGO
  • You Tube
  • Linkedin
  • Twitter
  • Telegram
  • Google Play

Copyright © Equitymaster Agora Research Private Limited.

Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap

Phone +91-9136015013

Equitymaster Agora Research Private Limited (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407

Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com

LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.