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A Volatiles Day of Trading
Wed, 6 Apr Closing

After having witnessed a fairly volatile day with the index crossing the dotted line multiple times, the Indian stock markets ended the day marginally in the green amid mixed international cues. At the closing bell, the BSE Sensex closed higher by 17 points, the NSE Nifty finished higher by 11 points. The S&P BSE Midcap and the S&P BSE Small Cap finished up by 0.6% and 0.9% respectively. Barring IT and banking stocks, all the sectoral indices finished in the green. Gains were largely seen in metal and capital goods stocks.

Asia markets ended mixed despite advances in oil prices and signs of pick-up in China's services sector. The Hang Seng gained 0.15%, while the Nikkei 225 & the Shanghai Composite fell 0.11% and 0.08% respectively. European markets are trading mixed today. The CAC 40 is up 0.55%, while the FTSE 100 gained 0.51%. The DAX is even.

The rupee was trading at 66.32 against the US$ in the afternoon session. Oil prices were trading at US$ 36.80 at the time of writing.

According to an article in The Economic Times, ONGC has received green nod for its Rs 3.5 billion project of drilling 22 exploratory wells in NELP-9 blocks located at Banaskantha, Gandhinagar and Ahmedabad in Gujarat. According to the proposal, wells would be drilled in blocks CB-CNN-2010/1, 6 and 9, which were awarded to ONGC way back in March 2012 through the NELP-9 bidding process. The petroleum exploratory license to start the activities as per the production sharing contract (PSC) was granted in February 2013. The initial contract period is seven years.

Reportedly, the clearance has been granted only for exploratory drilling of 22 wells. In case development drilling is to be done in future, the company would have to take prior clearance from the ministry. The total cost of the project is Rs 3.5 billion and each well will be drilled up to a depth of 3,000 meters. ONGC is India's largest government-run corporation and produces about 70% of India's crude oil and natural gas.

The script of ONGC finished up by 0.3% on the BSE. The stock price of the company has fallen 40% in the last one year while the crude oil prices have corrected around 60%. In our recent edition of The 5 Minute WrapUp Premium, we have discussed if it is the right time to invest in ONGC (Subscription Required).

Meanwhile, the government recently hiked petrol prices by Rs 2.19 a litre and diesel by 98 paise per litre. The hike comes on the back of a steep Rs 3.07 a litre increase on March 17 and a Rs 1.90 a litre hike in diesel rates. While this is the second straight increase in petrol price, this is the fourth straight fortnightly increase in diesel rates. The three hikes in diesel rates since February 16 total Rs 3.65 per litre. Reportedly, state-owned fuel retailers IOC, Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) revise rates of the fuel on 1st and 16th of every month based on the average oil price and the foreign exchange rate in the preceding fortnight.

Moving on to news from the healthcare sector. Shares of Lupin finished up by 1.5% on the BSE after it was reported that the company's US subsidiary -- Lupin Pharmaceuticals Inc. (collectively Lupin) has launched the first product from its GAVIS pipeline, Zolpidem Sublingual Tablets, 1.75 mg & 3.5 mg, which is the generic equivalent of Purdue Pharma L.P's Intermezzo Sublingual Tablets, 1.75 mg & 3.5 mg, having received final approval from the United States Food & Drug Administration (FDA) (Subscription Required) earlier, as well as final clearance from the FTC with 180 days of exclusivity.

Zolpidem Sublingual Tablets, 1.75 mg & 3.5 mg are AB-rated generic equivalent of Purdue Pharma L.P's Intermezzo Sublingual Tablets, 1.75 mg & 3.5 mg and is indicated for the treatment of insomnia when a middle-of-the-night awakening is followed by difficulty returning to sleep. Reportedly, Intermezzo had US sales of US$ 9.46 million.

The US market has been a principal growth engine for many Indian pharma companies. Lupin, has not only reaped gains from selling low cost generics, but has also garnered a sizeable share of the US generic market (Subscription Required).

Pharma stocks finished on a positive note with Natco Pharma and Novartis leading the gains.

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