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Lackluster day for the markets
Thu, 23 Dec Closing

Indian indices opened on a positive note, but they barely managed to keep afloat for a majority of the trading session today. The indices traded, in and around the dotted line, to finally close in the red. While the BSE-Sensex closed lower by around 33 points (down 0.2%), the NSE-Nifty fared slightly better with a 5 point drop (down 0.1%). The BSE Midcap and the BSE Smallcap indices also felt some pressure. Both closed lower by 0.2%. Except for pharma and IT stocks, most other sectors saw some selling pressure. Consumer durables and metal stocks bore the brunt of investors.

As regards global markets, most major Asian indices closed in the negative today while European indices opened on a mixed note. The rupee was trading at Rs 45.14 to the dollar at the time of writing.

India's inflation troubles are far away from easing. The food price index rose 12.1% from 9.5% (previous week) in the year to December 11. This almost 3% hike was due to the 30% increase in the prices of onions. This humble vegetable's price rise has made everyone shed tears as it is a key ingredient for a number of basic Indian dishes. Unseasonal rains have also damaged other food crops. A mild increase in fuel price inflation was also seen. But, now with crude prices above US$ 90/barrel, further hikes in fuel prices are expected. At the way things are going, it will be increasingly more difficult for the RBI to achieve its inflation projection of 5.5% at the end of March 2011. Annual inflation in November eased to 7.5% (lowest level in a year), from 8.6% in October. However, inflation in December/January does not look so optimistic.

Fearing a contagion in the market, which may lead to mass defaults, the RBI urged commercial banks to continue lending to microfinance institutions (MFIs). This was despite collections falling significantly in the state of Andhra Pradesh. This state counts for a large chunk of all MFI loans (30-40%). In another move to help save this cash-starved sector is the fact that Grameen Capital India announced a US$ 8 m credit guarantee on funds provided to eligible microfinance lenders. This unit is an affiliate of the Bangladesh based Grameen Foundation, co-founded by Muhammad Yunus.

Pharma stocks closed positive, and the index was the top gainer for the day. Sun Pharma was the top gainer, with Dishman Pharma was on the losing end among the Indian pharma companies. Glenmark today announced that it received approval from the US Food and Drug Administration (USFDA) to market 3 generic drugs in the American market. Its US subsidiary received final approval from the USFDA for two products Indomethacin capsules (25 mg and 50 mg) and Sulfamethoxazole and Trimethoprim tablets. Indomethacin is used in treating arthritis. According to IMS Health, total sales achieved for the drug in the US market for the 12 months ending Sept 2010 was US$ 20 m. Sufamethoxazole and Trimethoprim tablets are used for treating urinary tract infections. Sales for these drugs stood at US$ 31 m for the same period in the US.

Apart from this, Glenmark received a tentative approval from USFDA for Eszopiclone (used for insomnia treatment), a generic version of Sepracor's Lunesta. According to IMS Health, this drug achieved annual sales of US$ 760 m for the same 9 months period. The stock closed in the positive in a fairly subdued market.

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Mar 16, 2018 (Close)