Indian stock market
had a volatile outing today as they oscillated to either side of yesterday's close. While the morning session saw the indices barely managing to stay afloat, profit booking began to take its toll and the afternoon session saw the indices languish largely in the red. There was no change in scenario in the final trading hour and the indices closed below the dotted line. While the BSE-Sensex closed lower by around 55 points (down 0.3%), the NSE-Nifty closed lower by around 14 points (down 0.3%). The BSE-Midcap and BSE-Small cap, however, bucked the trend as they notched gains of 0.2% and 0.4% respectively. Losses were largely seen in auto and healthcare
As regards global markets, most Asian indices closed weak today while European indices have also opened in the red. The rupee was trading at Rs 44.57 to the dollar at the time of writing.
As per a leading business daily, Power Finance Corporation envisages raising over Rs 220 bn through infrastructure and tax-free bond issues during the current financial year to partly fund its borrowing requirements. It must be noted that the company's borrowing target for FY12 is Rs 300 bn. Out of this, it has already raised Rs 34 bn from the follow on offer, Rs 30 bn and Rs 10 bn from bonds and term loans respectively. PFC's borrowing target for FY11 stood at Rs 270 bn. These funds are utilised for funding power projects in the country. In this regard, PFC has so far allotted three independent transmission projects (ITPs) to successful bidders. Plus, it will finalise two more such projects in FY12.
It must be noted that in July 2010, PFC received the status of an Infrastructure Financing Company (IFC) from the RBI. The new status allows the company to finance a wider spectrum of projects in the infrastructure space. Not to mention the additional leeway to concentrate on few and profitable projects. The stock closed higher today.
Pharma stocks closed mixed today. While Biocon and Cadila Healthcare led the pack of gainers, Dr.Reddy's and Ranbaxy closed in the red. Troubles for Ranbaxy do not seem to end. As per a leading business daily, US drugstore chain RiteAid has filed a complaint against Ranbaxy alleging that the Indian drugmaker has refused to cover the legal costs and losses the retailer has suffered in defending the company for selling a generic drug that has shown undesirable side effects. The drug in question is 'metoclopramide' and is the generic version of Wyeth's patented drug 'Reglan'. It is used for the treatment of heartburn and nausea. Reglan had annual sales of US$ 50 m in 2010. It must be noted that RiteAid is currently facing many lawsuits in the US as consumers are seeking damages for not being warned about potential side effects of this drug being sold. Hence, RiteAid is suing Ranbaxy as it has stated that the latter is contractually obliged to defend and indemnify RiteAid.
Ranbaxy has had trouble in the US in the past as well. Two of its plants at Poanta Sahib and Dewas were shut down by the US FDA for not complying with good manufacturing practices. As a result, revenues from the US were adversely impacted. These issues are yet to be resolved.