Indian equity markets continues to trade strong over the last two hours of trade on back of heavy buying activity witnessed across industry heavyweights. Auto and metal stocks witnessed maximum buying interest.
Energy stocks are trading in the green led by Oil and Natural Gas Corporation Ltd. (ONGC) and Cairn India. According to a leading financial daily, ONGC Teri Biotech Limited (OTBL), the joint venture between state-run explorer Oil and Natural Gas Corporation (ONGC) and The Energy and Research Institute (Teri), is planning to bid for Rs 150 bn desert oil slick clean-up contract in Kuwait. The Kuwait Oil Company has engaged a project monitoring consultant to prepare the tender specifications. The specifications could be ready by January 2013. The contract is to clear the oil slick created in the Gulf war following Iraq's invasion of Kuwait in 1990. The contract being a USD $3 bn project, OTBL might have to use ONGC's balance sheet to be eligible to bid for the project. ONGC has a 49.9% stake in OTBL, while Teri's stake is 48%.
Pharma stocks are trading strong led by Cadila Healthcare and Aurobindo Pharma. As per a leading daily, the Group of Ministers (GoM) in charge of formulating the New Pharmaceutical Pricing Policy have proposed to bring prices of around 348 drugs under government control. At present the government controls 74 drugs and their formulations through the National Pharmaceutical Pricing Authority. The GoM will send their recommendations to the cabinet for approval. This is aimed with the objective to bring drugs in National List of Essential Medicines (NLEM). The cost based formula has been discarded and the ceiling price will be calculated by using the weighted average price (WAP) of brands with over 1% market share by volume. However, the pharmaceutical industry is not happy with this decision as it may result in loss of revenues for them in the short term.