Indices in the Indian stock market staged a smart recovery during the closing stages of the session. However, this surge could not take them past the break even line and consequently, the indices closed the day lower on yet another occasion. While the BSE-Sensex edged lower to the tune of 90 points (down 0.6%), decline on the NSE-Nifty came in at around 30 points. Bigger losses were seen in BSE Mid Cap and BSE Small Cap indices as they edged lower by 1% and 2% each. Nearly three stocks closed lower for every two that gained on the Sensex today.
Almost the whole of Asia closed the day in the red today whereas Europe too is soaked in the same colour currently. The rupee was seen trading at Rs 51.4 to the dollar at the time of writing.
While Euro zone concerns continue to cast a shadow on asset markets across the globe, reports that China's property sector may be overheating added further fuel to the fire. Clearly, it does look like the world economy and with it the global equities are giving one of their sternest tests yet.
In what should come as a negative to the pricing power of the Indian pharma companies, the Honourable Supreme Court has told the central government to ensure that prices do not change from the current levels post the pharma pricing policy 2011. The Court said that in the name of the new policy, the prices should not escalate. It should be noted that there was a PIL filed some time back in 2003 by an NGO (Non-government organization) that complained that only a handful of drugs came under price control and the rest were out of reach of common man. However, subsequently, the Department of Chemicals and Petrochemicals informed the court that it had started taking steps towards creation of new policy that would bring a lot more drugs under pricing control. But the court was forced to intervene following apprehensions that the new policy could lead to steep hike in prices. Pharma stocks closed mostly lower today.
PSU refiners such as Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) witnessed strong traction on the bourses and closed higher by 2% and 7% each. The optimism seemed to be a result of a massive decline in crude prices overnight to the tune of 4%. The correction came in the wake of mounting worries over the Euro zone economy and the overall health of the global economy. The news though was music to the ears of domestic refiners as it would help reduce their subsidy burdens, which were for some time now suffering a double whammy of higher crude prices and also rupee depreciation.