Asian stock markets have opened the day on a mixed note. On one hand markets in Korea (up 0.3%) and China (up 0.03%) are facing buying interest. On the other hand, markets in Hong Kong (down 0.9%) and Singapore (down 0.7%) are trading in the red. The Indian stock market have opened the day on a flat note with a negative bias. Stocks in the technology and auto space are leading the losses.
The BSE-Sensex is down by around 9 points (0.03%), while the NSE-Nifty
is down by around 7 points (0.1%). However, Mid cap and small cap stocks are trading in the positive zone, with the BSE Mid Cap and the BSE Small Cap indices up by about 0.1% each. The rupee is trading at 50.81 to the US dollar.
Energy stocks have opened the day on a weak note with BPCL (Bharat Petroleum Corp Ltd) and Reliance Industries leading the losses. The oil marketing companies (OMCs) have decided to do away with the opaque pricing system for fixing petrol prices. They would now be revising the price for the fuel every two weeks. The current mechanism will be replaced by a transparent and predictable system which will aim to align domestic prices of petrol with that of the international levels. As stated by the Chairman of BPCL, this method would ensure that petrol prices will actually fall when international prices ease off. The companies have increased the prices of petrol 13 times over the past one and a half years even though the international prices did decline during some intervals in this period. Although petrol prices were decontrolled last year, they are still indirectly controlled by the government as the OMCs have to consult the oil ministry before changing the price.
Pharma stocks have opened the day on a positive note with Piramal Healthcare and Cipla Ltd leading the pack of gainers. Multinational (MNC) pharma companies have expressed concerns over India's attempts to check foreign investments in the sector as well as expanding drug pricing controls. The head of Pfizer India has stated that such attempts may cause multinationals to exit from the country altogether. Such controls and attempts would tarnish the attractiveness of the Indian pharma market. The government had stated earlier this month that investments up to 100% in existing pharma companies would require the approval of the government. Currently only the approval of Reserve Bank of India (RBI) is required for this purpose. This new measure was approved after there were concerns of domestic companies being taken over by the foreign firms. The MNC pharma firms have stated that these measures are designed to delay or prevent investments in India. In addition to this, the government has also sought to bring nearly 60% of the domestic formulations under price control as per the new proposed National Pharmaceutical Pricing Policy (NPPP).