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After opening the day on a marginally negative note, the Indian indices have continued to trade near the dotted line. Sectoral indices are trading on a mixed note with stocks from the power, metal and capital goods sector leading the losses.
The BSE Sensex is trading down 35 points (down 0.1%) and the NSE Nifty is trading down 12 points (down 0.1%). The BSE Mid Cap index is trading up by 0.4%, while the BSE Small Cap index is trading up by 0.5%. The rupee is trading at 67.47 to the US$.
Stocks in the automobile space are trading on a mixed note with TVS Motors leading the gains and Maharashtra Scooters leading the losses. As per an article in the Economic Times, automobile companies that fail to recall vehicles despite having clear evidence of safety defects may face penalties starting from the 1st of October. Further, there is consideration for a government-appointed nodal agency that could launch its own investigation into safety issues and even recommend the government to recall the vehicles.
Further, the government could order manufacturers to recall vehicles if a certain percentage of buyers complain of a safety defect, according to a draft of amendments proposed to the Central Motor Vehicle Rules, 1989.
The move comes as the government is working on introducing the Road Transport and Safety Bill, 2015, in the next session of Parliament.
The above development is preceded by the government's old-vehicle-scrapping-policy. One must note that the government, during last month, had proposed the old-vehicle-scrapping policy. With this policy in place, the owners of old vehicles will get a deal for themselves. They will be incentivized for scrapping their old vehicle and buying a new one. There will be new vehicles plying on Indian roads thus leading to lesser pollution. Further, the government will get more money from taxes on new vehicle purchases. The policy will also benefit interlinked sectors. For example, the steel industry will get good quality scrap, and hence will be less dependent on imports.
Moving on to the news from pharmaceuticals space... As per a leading financial daily, the Drug Controller General of India has launched inspections against 200 drug makers, including some biggies like Cipla and Pfizer.
The inspections are launched for allegedly selling poor quality medicines and non-compliance to manufacturing norms.
Reportedly, notices have been issued to some of the companies. One must note that this is the first time that inspections on this scale have been undertaken by the domestic regulator.
The move comes at a time when Indian pharma companies are facing major challenges of fresh price cuts, a lower-than-expected uptake and a drop in sales of fixed dose combination drugs (subscription required). Due to these factors, the growth in Indian pharmaceuticals market dipped to its lowest in two years this May.
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