Indian equity markets have fallen in the last 2 hours of trade and are trading in red. This seems to be largely attributable to disappointing wholesale price inflation (WPI) number which was up at 6.1% from 5.8% in July 2013. The headline inflation rose at the fastest pace in last six months, this was largely driven by the surge in food prices. Most sectors are trading in red barring the stocks from Banking, Auto and FMCG space.
Majority of the steel stocks are trading in the green with JSW Steel and Maharashtra Seamless being the biggest gainers. As per a leading financial daily, Steel Authority of India Ltd (SAIL) is contemplating setting up a special steel venture with Japan's Kobe Steel. The steel thus manufactured would be utilized in the defence sector or automobiles. This will be SAIL's second joint venture with Kobe which is a pioneer in special steel. SAIL had signed a Memorandum of Understanding (MOU) with Kobe last year for 0.5 m tonne iron nugget plant using the ITMK3 technology. This project will come up at the company's alloy steel plant in Durgapur. SAIL is on an expansion and modernization drive and is expected to have an installed steel capacity of 19 m tonnes by the end of FY14. As per the company, expansion of its Bhilai plant will take place in FY15 and raise its capacity to 23.5 m tonnes. However, the company has deferred its long term target of 50 m tonnes hot metal capacity from 2020 to 2025. This is in line with the government's target of 300 m tonnes of installed capacity by 2025. Reportedly, the installed capacity in the country stands around 90 m tonnes. SAIL has said that project financing is the biggest challenge in realizing the target set and has sought government aid in this regard. The stock is currently trading flat.
Most of the Indian pharma stocks are trading in red with Ranbaxy Ltd and Wockhardt Ltd being the top losers. Sun pharmaceuticals Ltd, has received approval for lansoprazole, delayed released capsules of strength 15mg and 30mg. The said drug is bioequivalent to Takeda's Prevacid brand. Reportedly, the US market size of this drug is $430 m per annum. Prevacid is indicated for short term treatment (4 weeks) for healing and symptoms of active duodenal ulcer. With this approval, Sun pharma now has total 320 ANDAs (Abbreviated new drug application) and approximatley 133 drugs await approval. Some Indian generic companies viz Dr Reddy's, Natco pharma, Wockhardt Ltd and Zydus healthcare are also having approval for the drug. One should also note that Prevacid 15mg is also sold by some companies as an over the counter (OTC)drug in the US market.