Led by persistent selling activity, Indian equity markets continued to trade weak during the post noon trading session. Barring IT and metal sectors, all the sectoral indices are trading in the negative territory. Stocks from the oil and gas and capital goods sector are witnessing maximum selling pressure.
Majority of the mining stocks are trading in the red with Gujarat NRE Coke and Sesa Goa being the biggest losers. However, Ashapura Minechem and Coal India Ltd (CIL) are trading strongly. As per a leading financial daily, the Coal Minister has said that the government is prepared to split CIL into small companies in order to promote healthy competition and boost production. The government wants to encourage public-private partnership (PPP) in coal and encourage development of state-owned mines by private firms to increase efficiency and reduce the scope of fraudulent practices. The government had invited consultants to study the structure of Coal India and recommend changes. The decision on spinning off CIL's subsidiaries will be taken on the basis of the report which is likely to be released by December 2013. CIL stock is currently up 0.8%.
Domestic pharma stocks are trading mixed. While Torrent Pharma and Aurobindo Ltd are leading among the gainers, Panacea Biotech and Orchid Chemicals were out of favour. Dr Reddy's Ltd has called off the deal signed with Japan's Fujifilm Corporation. Both the companies have decided to terminate the memorandum of understanding (MOU), signed in July 2011. As per the MOU, both the companies entered into a joint venture (JV) for generic drug formulations in Japan. However, as Fujifilm has realigned its long term growth strategy for it pharmaceutical segment, both the companies agreed to terminate the partnership. Reportedly, both the companies will continue to explore future opportunities in other pharmaceutical verticals such as API (active pharmaceutical ingredients), contract manufacturing etc. One should note that Dr Reddy's was not generating any revenues from this JV. Dr Reddy's was trading up by 1.2%.