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After opening the day marginally lower, the Indian stock markets registered gains and went on to trade on a positive note. Sectoral indices are trading on a positive note with stocks from the power, metal and capital goods sectors leading the gains.
The BSE Sensex is trading up 158 points (up 0.6%) and the NSE Nifty is trading up 48 points (up 0.6%). The BSE Mid Cap index is trading up by 0.4%, while the BSE Small Cap index is trading up 0.7%. The rupee is trading at 66.78 to the US$.
Stocks in the healthcare space are trading on a positive note with IPCA Labs and Natco Pharma leading the gains. As per an article in The Economic Times, the growth in Indian pharmaceuticals market dipped to its lowest in two years this May. This came on the back of a drop in sales of fixed dose combination drugs, fresh price cuts and a lower-than-expected uptake.
During the last month, the pharmaceuticals market grew by 7.7% compared to 11.6% during the same month last year. It reached sales of Rs 994 billion over a 12-month period based on Moving Annual Total (MAT). According to pharmaceutical market research company PharmaTrack, the country's fixed dose combination (FDC) market dropped 14.6% and is now valued at Rs 1.9 billion. Further, anti-infectives, derma and respiratory were the worst-hit segments.
FDC drugs are developed using two or more different active pharmaceutical ingredients (APIs) in a single pill. Sales of these drugs have witnessed a drop since March. This was seen as the Indian Health Ministry announced a ban on 344 fixed dosage combination (FDC) drugs. Over 100 combination drug makers have challenged the government's decision to ban such products at the Delhi High Court. In one of our premium editions of The 5 Minute WrapUp, we have explained how this ban poses a new challenge for the pharma companies (subscription required).
Moving on to the news from commodity space... Crude oil prices settled down today after witnessing a three-day rally in the past trades. This was seen on the back of a firm dollar overseas. However, the losses were limited on the back of concerns regarding Nigeria's oil industry. Crude oil has been witnessing buying interest this week and has hit its 2016 highs. Most of the gains are seen on the back of reports that showed a higher-than-expected drop in US crude supplies.
These gains were, however, preceded by losses witnessed last week as the Organization of the Petroleum Exporting Countries (OPEC) members failed to change the oil output policy at the meeting scheduled in Vienna. This came as Iran insisted on steeply raising its production. This was seen as yet another failure by oil producers after they failed to agree on a production cap during the summit in Doha earlier in April. However, some respite was found as Saudi Arabia promised not to flood the market and sought to mend fences within OPEC. Also, Saudi Arabia's oil minister stated that oil prices have recovered and will continue to.
At the time of writing, crude oil was trading at Rs 3,351 per barrel, down by around 0.7%. Do read what Richa Agarwal, research analyst at Equitymaster, has to say on the future prospects of crude oil prices.
To keep a regular tab on the movements in crude oil prices, you can read weekly market commentary from the Daily Profit Hunter team. Their weekly commentary tracks the developments in the global economy as well as equity, currency and commodity markets.
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