Indian stock markets have made some recovery in the last two hours of trade, however, they continue to trade below the dotted line. Barring stocks from IT sector all the sectors are witnessing selling pressure. PSU and realty stocks are leading among the pack of losers.
Majority of the automobile stocks are trading in the red with Mahindra & Mahindra and Escorts being the biggest losers. As per a leading financial daily, passenger car major Maruti Suzuki has deferred the commissioning of its Gujarat plant beyond FY16 in the light of the severe slowdown in automobile sales. Reportedly, the company has not commenced industrial construction work at the site. The company had planned an initial investment of Rs 40 bn to set up a manufacturing plant near Mehsana in Gujarat. The plant with a capacity of 2.5 lakh units was to go on-stream by 2015-16. Maruti Suzuki has not specified when it would commence work at the unit. The company has said that it is analyzing the current slowdown in the domestic market before arriving at any decision on new facilities in the state of Gujarat. The stock of Maruti Suzuki is currently down by 2.4%.
Most of the Indian pharma Stocks are trading in red, with Dishman Ltd and Elder pharma leading the pack of losers. As per the financial daily, Delhi court has extended the relief period on relabeling of their existing stock as per the new pricing policy. Some of the companies including Sun pharmaceuticals and Cipla Ltd have been given an extension to replace their inventories with the new price labels. The next hearing on this case is now scheduled on September 23 2013. The two companies along with various other pharma companies like; Lupin Ltd, Wockhardt, Alembic pharma, and so on had challenged the government on specific provision under Drug Price Control Order 2013. As per this order, the companies have to compulsorily change the label to revised prices within 45 days of the price notification. This extension would provide additional time to the companies to sell the drugs on the old price, which are likely to be higher than the revised prices given by the regulators.