Asian stock markets have opened the day with significant losses on concerns of a recession in US as well as in Europe. Stock markets in Hong Kong (down 2.4%), South Korea (down 4.7%), Indonesia (down 2.5%), Nikkei (down 2.1%), and China (down 1.3%) are trading in the red. The Indian stock market have continued the losses of yesterday and have opened the day on a weak note again. Stocks in the IT, consumer durables and capital goods sectors are facing significant selling pressure.
The BSE- Sensex is trading lower by around 321 points (1.9%) and the NSE- Nifty is down by around 96 points (1.9%). Midcap and Small cap stocks are trading in the red as well, with both the BSE-Midcap and BSE-Smallcap indices down by 2% each. The rupee is trading at 45.85 to the US dollar.
Oil & Gas tocks have opened the day on a mixed note with Reliance Industries Essar Oil and Cairn India trading in the red while IOC, HPCL and BPCL are leading the gains. Hindustan Petroleum Corp Ltd (HPCL) is in talks with 2 international companies to revive the delayed US$ 10 bn refinery and petrochemicals project located at Vizag in Andhra Pradesh. It is said that BP Plc and Total SA of France have renewed their interest in the project. The company said that HPCL is trying to sell the stake to both the companies. This project was set up by an HPCL- led consortium in 2009. The consortium had included LN Mittal group, Total of France, Oil India (OIL) and GAIL. The project was put on hold as petrochemical demand was quite weak to justify the investment. While OIL and GAIL were ready to invest, Mittal group had in put its investment in the project on hold. In 2009, Total exited the project, forcing HPCL to freeze the project. Currently HPCL is conducting a feasibility report on the project.
Pharma stocks have opened the day on a weak note with Aurobindo Pharma, Orchid Chemicals and Divi's Lab leading with substantial losses. Drug Controller General of India (DCGI), the Indian drug regulatory body, has sent show- cause notices to pharma companies such as Cipla and Dr Reddy's Laboratories for selling drugs that have been banned by the government. Similar action is being planned against other major drug manufacturers as well. During surprise inspections in Delhi and Bhiwadi (Rajasthan) in June 2011, drug inspectors had found large stocks of three banned medicines with 85 chemists. DCGI is awaiting responses from the above mentioned companies. If the responses are not found to be satisfactory, it will commence prosecution against the companies by October 2011. If found guilty, the concerned officials of these companies would face a 2- year jail term as per Indian law.
During the raid, the three banned medicines found were diabetes drug rosiglitazone, antibiotic gatifloxacin and bowel disorder medicine, tegaserod. These brands include those of Dr Reddy's Laboratories, Cipla, Sun Pharmaceutical, Torrent Pharma and Macleods Pharma.