Indian share markets pared early gains and slipped in negative territory in the post-noon trading session. Sectoral indices are trading mixed with realty and oil & gas stocks being the biggest losers whereas capital goods and banking stocks are trading strong.
Most of the domestic pharma stocks are trading in the green with IPCA Labs and Divi's Laboratories being the major gainers whereas Natco Pharma and Biocon are among major losers. As per a leading financial daily, domestic pharmaceutical companies stand to gain from the regulatory changes pertaining to generic drugs implemented by Latin American (LatAM) countries such as Brazil and Mexico. As per the changed regulations, the governments in Brazil and Mexico have made use of bio-equivalent drugs mandatory. Bio-equivalent drugs are pharmacological replicas of the innovator drugs and offer similar efficiency. Bio-equivalent drugs are already a regulatory must in the US with India supplying 40% of the country's generics requirement. The pharma companies in the LatAM markets had been selling branded non-bioequivalent drugs called similar drugs so far. The new regulatory requirement will provide domestic pharma companies to tap the new markets. As per IMS, the total pharmaceutical opportunity in LatAM is estimated at $60 bn and the market will grow by 14%-15% annually. Domestic pharma companies such as Glenmark Pharmaceutoicals, Dr Reddy's Laboratories, Natco Pharma and Lupin together have a small market share of 2-3% of the LatAM region.
Barring GAIL India, almost all energy stocks are trading in the red today. Losers are being led by Chennai Petroleum and Gujarat State Petronet. As per a leading financial daily, state run energy major ONGC has increased its output by 8% from the biggest fields in Mumbai offshore during the past seven months. It may be noted that this is the first growth in the past couple of years and comes at a time when it has been facing repeated scrutiny from the oil ministry. ONGC is also planning to develop its discovered fields quickly including a few deep-sea discovered fields. ONGC has faced criticism from the ministry for long delay in development of its deep sea fields for which the company has cited issue of difficult terrain. It also expects most of its development of new gas field in the east and west to expedite and start output by FY18 onwards. Alternatively, the recent gas price hike will make exploration from deep sea fields more viable. ONGC stock is trading down by 1.3% today.