Indian equity markets had a volatile trading session today. While the indices began the day's proceedings on a firm note, they quickly pared gains and hovered around the dotted line in the noon. However in no time, the markets gained back the momentum and closed the day on firm note. While the BSE-Sensex today closed higher by 241 points, the NSE-Nifty closed higher by 61 points. Smallcaps and Midcaps were in much demand today. The BSE Mid Cap and BSE Small Cap indices closed higher by 5.82% and 5.19% respectively. Barring stocks from IT, pharma and Consumer goods sector, all the sectoral indices closed in green.
As regards global markets, Asian indices closed mixed today while European indices have opened weak. The rupee was trading at Rs 58.55 to the dollar at the time of writing.
Amidst huge financial inflows, the rupee has advanced to Rs 58.38 per US dollar hitting 11-months high level. On the weekly basis also, the rupee posted its best weekly gains in last eight months post BJP's victory declared recently. However the rupee appreciation has negatively impacted the stock prices of IT and Pharma sector stocks. An appreciating rupee is painful for these companies, as large part their revenues come from exports. BSE IT closed down by 4.95%, while BSE healthcare was down by 3.66% today.
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Indian pharma stocks have closed the day on a weak note. IPCA Labs and Wockhardt Ltd were the leading losers today. However, Orchid Chemical was the only stock that bucked the trend and closed with healthy gains. Dr Reddy's Laboratories is likely to invest US$300 m towards its proprietary product portfolio and US$150 m towards biological segment. It also plans to increase its R&D spend to 10-11% of sales in the current fiscal from about 9.4% in the last year. Roughly 65% of the R&D spend will be on global generics while the balance 35% will be towards biological and proprietary products. An increase in R&D spend will enable the company to launch new and better products into the market and thereby increase its share.