Markets plunge into the red

Fri, 11 Dec 12:30 pm

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Selling activity in index heavyweights has caused the benchmark indices to plunge into the negative territory during the previous two hours of trade. While buying activity is being witnessed in stocks from the auto and IT sectors, stocks from FMCG and banking sectors have failed to elicit sufficient investor interest and are seeing declines currently.

The BSE Sensex is currently trading lower by around 20 points while the NSE Nifty lower by 10 points. Stocks from the midcap and smallcap space are seeing marginal gains with the BSE MidCap index and the BSE SmallCap index trading almost flat. The rupee is trading at 46.56 to the US dollar.

Global pharma giant Pfizer has sued the domestic pharma company Dr Reddy's Laboratories in the US over a proposed generic variant of the popular cholesterol drug 'Lipitor'. Dr Reddy's had notified Pfizer in October 2009 that it was looking for a US FDA nod for Lipitor's generic variant. It may be noted that the copyright covering the drug has pediatric exclusivity until January 2017. Dr. Reddy's management has said that given the fact that this action stays approval of the company's ANDA until the case is resolved, it is not surprising that Pfizer has sued the company. The company is now working towards resolving the matter. In the first nine months of 2009, Lipitor's global sales stood at around US$ 8.3 bn as against US$ 9.3 bn in the corresponding period of 2008. Pfizer sees a huge threat to its sales of the drug if Dr Reddy's is allowed to sell the drug in the US market. The stock of Dr. Reddy's is trading lower currently.

As per a leading business daily, Yes Bank and India Infoline have entered into a strategic alliance to offer brokerage services to the customers of Yes Bank and savings account for India Infoline customers. According to the agreement between the two companies, Yes Bank customers will now have multiple options for trading in equity shares, online or off-line, on the NSE and BSE in the cash segment as well as in derivatives segments. The technology platforms of Yes Bank and India Infoline will be integrated for providing the brokerage services.

Yes Bank which has one of the highest non-fund based revenue contribution amongst private sector banks has seen the same reduce due to lower merchant banking transactions in the last 12 months. This move is therefore targeted at strengthening Yes Bank's fee income stream. The stock of Yes Bank is trading lower on the bourses currently.