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Sensex Erases Gains to Finish Flat; IT Stocks Drag
Tue, 13 Jun Closing

Share markets in India pared initial gains in the final hours of trade to end flat for the day. At the closing bell, the BSE Sensex closed higher by 8 points. While, the NSE Nifty finished lower by 10 points. Meanwhile, the S&P BSE Midcap Index ended flat while the S&P BSE Small Cap Index ended up by 0.4%.

Sectoral indices finished the day on a mixed note with information technology sector and metal sector witnessing maximum selling pressure. While realty stocks and power stocks finished the day in green.

Asian equity markets finished mixed as of the most recent closing prices. The Hang Seng gained 0.56% and the Shanghai Composite rose 0.44%. The Nikkei 225 lost 0.05%. European markets are higher today with shares in Germany leading the region. The DAX is up 0.49% while France's CAC 40 is up 0.28% and London's FTSE 100 is up 0.08%.

The rupee was trading at Rs 64.44 against the US$ in the afternoon session. Oil prices were trading at US$ 46.26 at the time of writing.

Coal India share price ended the day on negative note after it was reported that the company will continue to offer domestic coal to non-power sectors in lieu of 50% of the import component in the ongoing fiscal.

The development assumes significance as the government is working to eliminate coal imports. However, the fuel will be provided to non-power consumers in sectors such as cement, fertiliser, and steel without affecting the supply to the power sector.

Pharma stocks closed the day on a mixed note with Natco Pharma and Piramal Enterprises leading the losses. As per an article in a leading financial daily, the US Food & Drug Administration (USFDA) has granted marketing approval for ezetimibe tablet (10 mg) to two Indian companies - Sun Pharma and Zydus Cadila.

Ezetimibe, a generic version of Merck's Zetia tablet, is used to reduce high cholesterol levels. Zydus will produce the tablet at the group's formulations manufacturing facility at Moraiya, Ahmedabad.

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As per IMS, ezetimibe tablet had annual sales of approximately US$ 2.7 billion in the US for the 12 months ended April 2017.

Meanwhile, Cadila Healthcare's US division Zydus Pharmaceuticals' subsidiary Neshar Pharmaceuticals has received final approval from the USFDA to market Nystatin Topical Powder USP, 1,00,000 units per gram.

The drug will be produced at the Neshar Pharmaceutical manufacturing facility located at the St. Louis, USA.

Notably, the group now has more than 115 approvals and has so far filed over 300 abbreviated new drug applications (ANDAs) since the commencement of the filing process in the financial year ended March 2004.

In a recent edition of The 5 Minute WrapUp, we wrote about the USFDA crackdowns faced by the Indian Pharma in the recent times and how they have been constantly investing towards R&D. We believe pharma companies that are upgrading and keeping facilities compliant, and have niche product pipelines in place will see sustained revenue growth going forward.

Further, speaking of pharma space in India, according to a report by The Hindu Business Line, in spite of the prevailing challenges in the Indian pharma sector is expected to grow up to 45% by 2025 and 58,000 additional employment opportunities are likely to be created in the industry amid the job crisis in India.

Indian Pharma Revenue Growth Accelerates

Despite the capping of prices, notebandi and GST implementation, all of which are perceived to impact the pharma sector adversely, the industry will continue to grow. In fact, by 2020, the pharma market could touch US$ 55 billion in revenues, a CAGR of about 15.9%.

Cadila Healthcare share price ended down by 1.2% while Sun pharma share price finished up by 0.6%.

Moving on to the news from the economy. Retail inflation i.e. consumer price indexed (CPI), inflation in India during May fell to 2.18%, as compared to 5.76% in the same month of last year, pulled down by sharp fall in food prices.

The May retail inflation rate fell, even as compared to April when it prevailed at a higher rate of 2.99%. The price of pulses dipped by close to 20% in May while vegetables became cheaper by 13.44%. Retail inflation in fuel and light eased to 5.46% in May from 6.13% in April.

Meanwhile, industrial production rose at a slower pace in April, raising demands for a rate reduction by the RBI. Latest data released on Monday showed that industrial production expanded by 3.1% in April, compared to 3.8% in March and 6.5% a year ago, as mining and electricity sector witnessed a slowdown.

Notably, earlier this month, the Reserve Bank had maintained status quo on key lending rate (repo) citing risks to inflation.

With headline inflation undershooting the RBI's mid-term target of 4% for the past seven months, pressure has mounted on the central bank to resume interest rate cuts to juice up economic growth that has hit the lowest level in more than two years.

And here's a note from Profit Hunter:

Power Grid Corporation is the top gainers in the Nifty 50 Index today - up 2.35%. The stock is trading close to a new 52-week high.

In an earlier note, we mentioned Power Grid's RSI indicator was trading at its resistance level, suggesting a correction on the cards. The stock did correct 7% from that point. This led the RSI indicator to trade near its support zone, as you can see in the chart below.

The price gained some momentum as the RSI found support.

Today, the stock is trading close to a 52-week high and the RSI indicator has not reached its resistance level. The volumes are also heavy.

Is this an indication of more upside? Let's wait and see...

Power Grid up 2% for the Day
Power Grid up 2% for the Day 

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Nov 23, 2017 09:21 AM