Indian stock markets lost the initial gains and are hovering around the dotted line during the post noon trading session. Selling pressure is being witnessed in stocks from the metal and auto sectors while realty and capital goods sector are seeing maximum buying interest.
Most of the domestic pharma stocks are trading in the green with Dishman Pharma and Indoco Remedies being among the leading gainers. As per a leading daily, the Indian Supreme court dismissed Swiss based company Novartis AG's petition seeking patent for its cancer drug Glivec. The Supreme Court upheld an earlier verdict given by the tribunal court and Indian patent law. As per the judgment the said drug failed the test for innovation as specified under the Patent Act. Novartis has filed various litigations in Indian courts since 2006 to get a patent for Glivec in India. Indian law has refused to grant it a patent as it does not consider Glivec a new molecule and deems the drug is only an amended version of a known compound. The drug is sold by Cipla and Natco Pharma in Indian markets. The decision is favorable to both the companies. Cipla was trading up by 2.5%.
Majority of the hotel stocks are trading in the green with Country Club and Hotel LeelaVenture being the biggest gainers. Taj GVK and Oriental Hotels are trading in the red. As per a leading financial daily, the hotel industry is expected to receive a big push if the government proposal to extend 'infrastructure status' to hotel projects with outlay of over Rs 2.5 bn sails through. This will enable the industry to access long term funding at lower interest rates. Currently, only three-star and higher category hotels located outside cities with population of over 10 lakh are eligible as infrastructure projects for bank finance. According to the Federation of Hotel and Restaurant Associations of India (FHRAI), 95% of the hotels were outside the ambit of this provision. Consequently, a number of hotel projects have been shelved or have changed their business model due to piling up of debt. The relaxation in rules will enable hotels to access 15-year loans as well as infrastructure bonds issued by finance companies. FHRAI expects the notification to this effect to come up in the next two months. Recently, the Reserve Bank of India (RBI) had permitted hotel companies access to external commercial borrowings for project size of Rs 2.5 bn or more.