After trading firm during post noon trading session, the Indian equity markets managed to hold ground and ended the day on a strong note. While the BSE Sensex today closed higher by 338 points, the NSE-Nifty closed higher by 87 points. Even the Smallcaps and Midcaps closed higher with both the BSE Mid Cap and BSE Small Cap indices recording gains of 1.6%. Barring stocks from Healthcare sector, all the sectoral indices closed in the green. Realty stocks were the biggest gainers today.
As regards global markets, Asian indices closed on a strong note today. The rupee was trading at Rs 60.1 to the dollar at the time of writing.
In a move that could further stoke inflation; the government is planning a monthly staggered hike in prices of LPG and kerosene. As per news reports, the government is planning to raise LPG prices by Rs 5 per cylinder per month and kerosene prices by Rs 1 per litre per month. Rise in oil prices due to disturbances in Iraq is not helping either. If fuel prices are increased this could further stoke inflation which is already above the comfort zone. It may be noted that recently the government increased rail fares and levied import duty on sugar. Both these measures too have inflationary tendencies. While there is no doubt about the economic rationale of these measures it would be interesting to see if the government can contain inflation that could emanate from these measures. If it is unable to do so and managing inflation becomes a challenge, we may witness tough times ahead.
Indian pharma stocks have closed the day on a mixed note. JB Chemicals and Torrent Pharma were among the leading gainers, while Piramal Enterprises and Ranbaxy Ltd were the leading losers. As per a financial daily, the Indian patent office has denied issuing patent on an anti cancer drug, Abraxane. US based company, Abraxis Bioscience had applied for patent for the said drug. Reportedly, the said rejection was made as per section 3(d). This section prohibits grant of patent to new forms of known substances. Unless the new forms shows enhanced efficacy over the known substance. As per the ruling, Abraxis drug lacked the required inventive step to get the patent protection. Even Novartis drug Gleevec's patent had lost the protection on similar grounds last year.
As the Abraxis drug does not have patent protection, this paves way for various Indian pharma companies to manufacture and launch the drug. It is imperative to note, the price of patented drugs especially the ones which fall in chronic category as this one are highly priced. Thus, this also means the companies will be able to manufacture and sell the drug at much lower prices. Companies like Cipla are selling this drug at quite lower rates.