Indices post a comeback

After languishing in the red for the most part of the day, the Indian equity markets made a comeback in the final hours of trade. While the BSE-Sensex today closed higher by 87 points, the NSE-Nifty closed higher by 24 points. Midcaps and Smallcaps too saw a similar trend today. While the BSE Mid Cap index closed the day higher by 0.5%, the BSE Small Cap index closed the day higher by 0.3%. Sectoral indices closed the day on a mixed note, with metal and banking stocks being the top gainers today.

As regards global markets, Asian indices closed on a mixed note today. The rupee was trading at Rs 61.25 to the dollar at the time of writing.

Energy stocks have closed the day on a mixed note with the gainers being led by the stocks of Essar Oil and Cairn India. As per a leading business daily, government refiner HPCL has temporarily shut down its Vishakhapatnam refinery. This is as a precautionary measure due to cyclone 'Hudhud'. The refinery was shut yesterday, and has a capacity of 8.3 m tonnes a year or 166,000 barrels per day (bpd). The company has indicated that there is no damage yet at the refinery since the cyclone has made land fall, and is confident of returning to normalcy with the passage of the cyclone.

Paint stocks have ended the day on a weak note with the stocks of Asahi Songwon and Berger Paints leading the list of losers. As per a leading business daily, Berger Paints is planning to set up a training academy for painters in Kochi to upgrade their skill. The facility is poised to be a full fledged training academy in Kochi for painters with about 3,200 sq ft of space being rented at Chembumukku for the academy. The facility is expected to start functioning from the first week of November. Painting booths and equipments will be made available for painters. Painters will also be trained on the use of paints and equipments, many of which will be imported. The company expects to make its painting process safer and better through this initiative.

Indian markets pare losses
01:30 pm

The Indian stock markets are trading marginally below the dotted line. In fact, the stock markets have pared losses in the previous two hours of trade led by sustained buying at lower levels. Entire broad markets are trading in the red today. Losers are being led by stocks from realty and pharma sectors while software stocks are leading the pack of gainers today.

The BSE-Sensex is trading down by 38 points and the NSE-Nifty is trading down by 2 points. Both The BSE Mid Cap index and BSE Small Cap indices are is trading down by 0.1% today. The rupee is trading at 61.24 to the US dollar.

Almost all mining stocks are trading on a firm note today, led by heavy buying in Hindustan Zinc and Coal India. As per a leading business daily, the country's largest coal miner Coal India, in a bid to improve productivity is planning to utilize existing underground resources/mines more efficiently as it has become difficult to operate new mines. This is on the back of hurdles involved in land acquisition and environmental clearances. It may be noted that mining from the underground mines costs more and is more challenging than that the opencast ones. Under Coal India's arm, 273 mines are underground and 164 are opencast, while some are mixed. As of now, an underground mine contributes only 8% to Coal India's total production, which has been on a steady fall since past few years. Alternately, production share for the underground mining for China is as high as 90%. The company is under pressure to improve the same and will explore mine-specific studies of its 90 underground mines. The stock is trading higher by 2% on the BSE today.

Most of the foreign pharma companies are trading in the red with Novartis and Abbott being major losers. As per a leading financial daily, the National Pharmaceutical Pricing authority (NPPA) has slapped a fine of Rs 3 bn on Novartis for overcharging consumers on sale of best selling painkiller medicine, Voveran. The company has also been served show cause notice to explain within two weeks why action should not be taken against it for overcharging. Voveran is based on diclofenac which was brought under the Price Control order along with 348 other medicines in May 2013. Companies such as Novartis, Cipla and GlaxoSmithKline Pharmaceuticals had contested the provisions of the new order and approached the court in July 2013. As per IMS Health annual data, Voveran clocked annual sales of Rs 2.25 bn and was among the top 10 brands in the domestic drug retail market as of April 2014. Voveran's market share has fallen since the new price control order became effective with its value growth falling by 14.5% from last year as per IMS data. Novartis stock is currently trading down 2.5%.

Banks & engg stocks drag down markets
11:30 am

After opening weak, the Indian Indices have remained well below the dotted line during the morning trading session. Banking and engineering stocks are witnessing the maximum selling pressure while IT and metal stocks are trading in the green.

The BSE-Sensex is trading down 115 points. The NSE-Nifty is trading down 34 points. The BSE Mid Cap index is trading down 0.1% and the BSE Small Cap index is trading down 0.3%%. The rupee is trading at 61.24 to the US dollar.

Majority of Indian pharma stocks are trading weak with Cipla and Dishman pharma being among the leading losers in the pack. As per the financial daily, India's leading drug maker Sun Pharmaceutical Industries had received some 483s in its recently inspected facility at Halol. Among the various observations, the USFDA has also raised concerns for company being lax in monitoring the follow-up corrective actions for the drugs it recalled from the US market early this year. Reportedly, the company has not put in place proper corrective actions in spite of drug recalls. The said claim came after the US regulators had visited its Halol facility, and noticed that in spite, the drug metformin supplied by company was recalled from the US market, and the company has not taken any preventive steps to resolve the issue. This issue was stated in form 483, the company has received recently. Further, the company did not put in place any formal corrective plans for anxiety drug Venlafaxine Hydrochloride extended release tablets, for which it initiated a recall four months ago, the inspectors noted. Sun pharma is trading down by 0.8%.

Telecom stocks are trading mixed today. While Tata Teleservices is leading the gainers; Bharti Airtel is among the top losers. As per the financial daily, the Indian government is looking to speed up the process of auctioning 3G spectrum for telecom companies. The Department of Telecom (DoT) has asked the regulator TRAI to recommend a base price for the same. The government is currently in talks with the defense ministry to release 15 MHz of spectrum that can be auctioned. However, with the talks currently in a deadlock, the government is looking to speed up the other parts of the process. 3G usage is growing at an exponential pace in the country and the government is keen to meet its target of 600 m broadband customers by 2020. All leading telcos have also asked the government for a speedy resolution to the issue.

Indian share markets open weak
09:30 am

All the major Asian stock markets have opened the day on a weak note with the markets in Japan (down 1.2%), Malaysia (down 2.1%) and Taiwan (down 2.3%) leading the losses. The Indian share markets have also opened the day on a negative note. Barring the IT and Teck indices, all sectoral indices are trading in the red with auto and realty indices leading the losses.

The Sensex today is down by around 161 points (0.6%), while the NSE-Nifty is down by about 50 points (0.6%). Mid cap stocks have also opened in the red with the BSE Mid Cap index down by 0.1%. However, the BSE Small Cap index has opened on a flat note. The rupee is currently trading at Rs 61.30 to the US dollar.

Telecom stocks have opened the day mainly in the red with AGC Networks and Bharti Airtel Ltd leading the losses. As per a leading financial daily, Bharti Airtel has sought immediate allocation of 1,800 MHz spectrum it had won in Delhi and Kolkata circles during the February auctions. The company has also sought continuation of existing 900 MHz band in these two circles for another six months for smooth migration. In separate news, Bharti Airtel has entered into a partnership pact with the Telangana government for the first public Wi-Fi in the state. At present, the pilot is in progress at 17 tested hotspot locations in Hyderabad that allow users to access Internet upto 750 MB per day across operators. The move is a part of the state government's broader agenda of allowing citizens to experience a multitude of web opportunities making Hyderabad a leading digital city. The smartphone, tablet, and other WiFi-enabled device users would be able to connect to data across these 17 locations.

Finance stocks have opened the day on a mixed note with Prime Securities Ltd and IndiaBulls Financial Services Ltd leading the pack of gainers. However, Religare Enterprises Ltd and Motilal Oswal Financial Services Ltd were trading in the red. As per a leading financial daily, Power Finance Corporation (PFC) may extend a Rs 150 bn loan to the Andhra Pradesh government. The loan will be extended for a two year period to improve power sector infrastructure facilities in the region. Of the total, around Rs 70 bn would be offered as loan towards transmission, while distribution and power generation would get Rs 50 bn and Rs 30 bn respectively.

India seems poised for recovery

Until last year, nothing seemed right for the Indian economy. It was saddled with high inflation, low growth, twin deficits, and worst of all, an air of hopelessness. Huge corruption, slowdown in the global economy, weak demand, and lack of business confidence hung like a shadow over the Indian economy. The biggest foreign funds were avoiding India until a few months back as the growth prospects seemed limited.

We have a come a long way since then. We have broken the jinx of less than 5% GDP growth that was stuck with us for nine quarters. The market sentiments have turned positive, as one can see from the returns the stock markets have offered this year. Be it consumer demand or business confidence index, all are showing signs of improvement, and the promise of a higher growth period ahead.

The biggest catalyst in this turn around of sentiments has been the rise of the Modi Government to power as pro reform and pro growth, it is a breath of fresh air. While it is too early to judge, so far it has made the right noises. And the timing for this change could not have been better. The declining commodity prices for a net commodity importer like India is giving huge tailwind to this positive change.

Among all emerging markets, India is one of the most attractive now. The country's sovereign rating has been upgraded. It now enjoys confidence of the global fund managers who have significant exposure to India. In short, the external and internal factors lend huge support to growth story. With its huge demographic dividend and reforms expected to be implemented soon, we believe India has got the right ingredients for a good future ahead. And with the political will and an active central bank focused on taming inflation, India is likely to continue on the path of recovery.