After a weak opening, Indian stock market
gained ground in the morning session as buying activity intensified across index heavyweights. The afternoon session saw the indices trade within a range although well above the dotted line. Momentum was sustained in the final trading hour as well enabling the indices to close in the green. While the BSE-Sensex closed higher by around 177 points (up 1%), the NSE-Nifty closed higher by around 42 points (up 1%). The BSE Midcap and BSE Small cap, however, were at the receiving end. While the former closed flat, the latter closed lower by 0.3%. Gains were largely seen in consumer durables and FMCG stocks.
As regards global markets, Asian indices closed mixed today while European indices have opened in the red. The rupee was trading at Rs 44.94 to the dollar at the time of writing.
Pharma stocks closed mixed today. While Lupin and Biocon found favour, Dr.Reddy's and Cipla closed in the red. As per a leading business daily, pharma major Lupin has entered into an alliance with Natco Pharma to jointly market generic versions of 'Tykerb' (Lapatinib Ditosylate) in the US market. 'Tykerb' is the patented product of global pharma major GSK Plc and is used for treating breast cancer. As of March 2011, the drug had generated sales to the tune of US$ 113.6 m as per IMS Health. Natco has filed the ANDA with the US FDA with a Para IV certification. Both the companies believe that they have a first-to-file status on the drug. Thus, in the event that they receive US FDA approval, they will be entitled to the 180-day exclusivity. Having said that, the launch of the drug would also depend on the outcome of the patent suit. Para IV filings (challenging patents) have become a regular feature in the US generics market. Since the competition in that market is intense, companies are looking at various strategies (including Para IV filings) to bolster revenues and profits from this market.
Food inflation has refused to ease off. As per a leading business daily, food inflation touched a two-and-half-month high of 9.13% in the week ended June 11. The rise was on the back of costlier fruits, milk, onions and protein-based items. While the prices of onions went up by 11.89%, those of eggs, meat and fish were up by 10.56% on an annual basis. The last time food inflation had crossed the 9% mark was in March 2011. Persistently high food inflation has been a headache for the government and the central bank. The latter especially has gone in for a series of rate hikes but so far overall inflation has refused to come within the comfort limits of the RBI. Rate hikes have in turn translated into higher interest cost for India Inc. and have impacted profitability; a scenario that is expected to persist in the near term at least.