Asian stock markets have opened the day on an upbeat note. Stock markets in Hong Kong (up 1.7%), Singapore (up 0.9%) and Japan (up 0.8%) are the biggest gainers. However, markets in Malaysia (down 0.1%) are witnessing selling pressure. The Indian stock markets have opened the day on a positive note as well. Almost all the sectoral indices have opened in the green. Stocks in the energy and auto space are leading the gains.
The BSE-Sensex is up by around 111 points (0.6%), while the NSE-Nifty is up by around 35 points (0.6%). Midcap and small cap stocks are trading in the positive zone as well, with the BSE Midcap and the BSE Small cap indices up by about 0.8% and 0.5% respectively. The rupee is trading at 44.38 to the US dollar.
Energy stocks have opened the day on a positive note with Reliance Industries, GAIL and ONGC leading the gains. India is on the cross-roads with the Middle East oil rich kingdom, Saudi Arabia. The issue relates to the anti-dumping duty imposed by India on polypropylene products. The product, which is essentially a derivative of crude oil, has been brought under the net of anti-dumping duty. The sector is currently dominated by Reliance Industries, which holds a 70% market share. The duty is supported by the Indian industry which argues that even with the anti-dumping component; India's basic import duty is lower than other countries. The levy is supported by other Indian petrochemicals majors like Haldia Petrochemicals as well. However, Saudi Arabia has criticized the duty and is actively lobbying to get rid of it.
Pharma stocks have opened the day in the green with Cipla and Glenmark Pharma leading the gains. However, the stock of Biocon is trading in the red. Biocon has announced its first quarter results for financial year 2012 (1QFY2012). Biocon's consolidated sales grew by 11% YoY during the quarter. During the same period, he net profits grew by 7% YoY. The profit increase is without considering the profits from the European subsidiary, Axicorp as it has been divested. The operations were partially affected by the unrest in the middle-east and lower licensing income during the quarter. However, the management said that the licensing income for the year will be as per expectations. Inherent variability in licensing income is linked to development and regulatory timelines and therefore it is better to be viewed on an annualized basis.