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Sensex, Nifty Stagnate; Dr. Reddy’s Drops On U.S. Drug Regulator Woes

Bloomberg Quint
Updated

Indian shares continue to stagnate as investors refrained from taking any meaningful position ahead of the key state election results locally and the Federal Reserve meeting next week.

The S&P BSE Sensex closed little changed at 28,929 while the NSE Nifty too ended the session flat at 8,927. The weakness in trade was evident from the market breadth, which was skewed in favour of the bears. About 879 stocks declined, 599 advanced and 69 remained unchanged on the NSE.

The country’s largest car maker Maruti Suzuki was the top gainer on both the key indices while Dr. Reddy’s Labs dropped the most on U.S. FDA concerns.

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Shares of the drug maker dropped as much as 2.8 percent after the Delhi High Court barred it from manufacturing and selling a generic version of Swiss drugmaker Novartis AG’s respiratory drug Onbrez in India.

In 2014, Cipla launched Indacaterol, the generic name of Onbrez, under its own brand name at one-fifth of the original price. Novartis, which held the patent for the drug, moved the High Court for infringement, saying it had partnered with Cipla’s Indian rival Lupin Ltd. to sell the drug in India.

Shares of edible oil maker rose as much as 4.2 percent to Rs 30.50 after market regulator Securities and Exchange Board of India (SEBI) allowed the company to trade in commodity derivatives.

SEBI allowed Ruchi Soya to trade for hedging physical market positions, it said in an exchange filing.

Ruchi Soya ReleaseThe volatility in prices of the input material for the company’s business is significant considering the scale of its operations. The resumption of hedging by the company will mitigate the impact of these price fluctuations.

The initial public offering of Avenue Supermarts Ltd., which operates the D-Mart chain of retail stores, was subscribed 2.2 times at the upper end of the price band, according to lead manager Axis Capital.

The Rs 1,870-crore public offer received bids for 9.64 crore shares versus 4.43 crore shares on offer. The IPO, which has a price band of Rs 295-299, will close on March 10.

  • QIB portion subscribed 2.10 times at upper price band

  • Non institutional portion subscribed 0.97 times at upper price band

  • Retail portion subscribed 2.79 times at upper price band

Oracle Financial Service Software Ltd. gains for 5th straight day

  • Stock trading with gains of close to 4 percent intra-day

  • Volumes remain high at 1.71 times its 20-day average on the NSE

  • Stock has gained 9.50 percent since Monday's opening

Major Indian equity indices remain range bound with the Nifty 50 index unable to break out above 9,000. With events of political and economic importance lined up in India this week, will indices break out of their respective ranges?

On Bloomberg Quint’s ‘Surf’s Up’, which tracks weekly trends in equity derivatives, Sameet Chavan of Angel Broking tells Agam Vakil he expects the Nifty to hit life time highs quite soon. He is bullish on certain two-wheeler manufacturers and public sector banks. For more on what levels to bear in mind and stocks to watch, listen in.

Shares of Petronet LNG Ltd. were trading lower by one percent at Rs 382.15 after the company in a stock exchange filing said that GDF International Ltd. plans to sell its entire 10 percent stake in the company.

Petronet LNG also said that it has informed the promoters of a first right of purchase or refusal in relation to this proposed sale.

The stock has outperformed the benchmark indices in the one-year period. While the stock has gained 55 percent, the S&P BSE Sensex index has gained 16.44 percent during the same period.

Drug firm Lupin Ltd. announced the launch of a pain relief drug 'Hydrocodone Bitartrate and Acetaminophen' in the United States.

In a BSE filing, Lupin announced the launch of Hydrocodone Bitartrate and Acetaminophen tablets in the strengths of 5 mg/300 mg, 7.5 mg/300 mg and 10 mg/300 mg having received an approval from the United States Food and Drug Administration (USFDA) earlier.

The company's product is a generic equivalent of Mikart Inc's Hydrocodone Bitartrate and Acetaminophen tablets.

The stock is trading flat at Rs 1,452.25 on the Bombay Stock Exchange.

  • Jubilant Industries snapped its two-day losing streak, and rose as much as 11.5 percent today.

  • The stock is very close to its 50-day moving average.

  • Volumes are currently over 2 times its 20-day average.

  • Fortis Healthcare has 10 lakh shares change hands in single block deal

  • Reliance Communications has 1.66 crore shares change hands in a block deal

  • Gokul Agro has 44 lakh shares change hands in two block deals

Shares of the pharmaceutical company fell 3.4 percent to Rs 2,750 after the U.S. drug regulatory made 13 observations for its Duvvada facility in Visakhapatnam. The observations were related to deviation from good manufacturing practices, according to the company's filing to the National Stock Exchange.

Dr Reddy's had received a warning letter from the regulator with regard to this facility in November 2015. After the commitments made by the company as part of its response to the warning letter were completed, a re-audit of the facility was scheduled for the first quarter of 2017, the company said in a presentation made in January 2017.

The company is addressing the observations made by the regulator, the stock exchange filing added.

The debt laden film-making company's shares fell 3.2 percent, the most since March 3, to Rs 215 after it decided not to proceed with the planned issuance of bonds due to expectations of 'wider pricing' by investors.

"We continue to have constructive conversations with investors and will decide a way forward over the course of today and tomorrow," said Group CEO and Managing Director Jyoti Deshpande in an email to Bloomberg, speaking about refinancing of the company's debts.

The rupee today lost 12 paise to 66.83 as the dollar remained in the driver's seat on the growing buzz that the U.S. interest rate is set to go up.

The Fed is meeting next week to take a call on this. A higher U.S. rate means flight of investors from emerging markets in search of higher returns.

Apart from the increased demand for the American currency from importers and banks, its strength against other currencies overseas pulled down the rupee.

A lower opening in the domestic equity market did not help things. Yesterday, the rupee had weakened 4 paise to 66.71 in a relatively muted trade on renewed demand for the greenback.

Shares of the Mukesh Ambani-led firm fluctuated between gains and losses after 12.2 percent of equity change hands in three block deals.

According to Bloomberg data, about 39.61 crore shares or 12.2 percent of equity change hands on the BSE. It was the most traded Indian stock by volume and value. The buyers and sellers were not immediately known.

Indian shares declined for a third straight session following weak trading in Asian peers, as investors hold bets ahead of the Federal Reserve meet and key state election results next week.

The S&P BSE Sensex fell 0.3 percent to 28,815 while the NSE Nifty too lost 0.3 percent to 8,899. The 50-share index has found a strong support at the 8,900-mark.

The market breadth was skewed slightly in favour of the sellers. About 740 stocks declined, 705 advanced and 456 remained unchanged.

  • Dr. Reddy’s Labs: Gets 13 FDA observations for Duvvada plant

  • Kotak Mahindra Bank: Founder Uday Kotak sells 1.5% stake in lender (BSE)

  • Eros International: Scraps plans to raise $200 million via dollar bond sale (Bloomberg)

  • Shree Renuka Sugar: Allots 16.4 million shares to lenders on part conversion of the loans

IPO Watch

  • D-Mart’s parent Avenue Supermarts IPO fully subscribed on day 1; offer close March 10

  • Music Broadcast IPO gets 39.5 times demand for shares offered on last day

  • Delhi ATF tax cut only for regional connection flights: Official

  • RBI objects to terms between Tata, Docomo to settle dispute

  • Global funds buy Rs 3,570 crore of local stocks; domestic funds sell Rs 1,740 crore on March 8: Provisional data

  • PepsiCo, Coca-Cola face boycott in second Indian state on water

Good Morning!

The Singapore traded SGX Nifty, an early indicator of Nifty’s performance in India, dropped 0.6 percent to 8,903.

Most Asian stocks declined in early trade, after data showed Chinese producer prices rising at the fastest pace since just after the Beijing Olympics, while consumer prices weaker than expected.

Japanese equities bucked the trend as a weaker yen lent support after better-than-expected U.S. private jobs report spurred gains in the dollar and drove down Treasuries.

Data from the ADP Research Institute showed private payrolls climbed by 298,000 in February, outstripping the 187,000 median projection of analysts surveyed by Bloomberg.

The strong private sector performance triggered forecast revisions for February non-farm payrolls, due on Friday. The median estimate of Bloomberg’s poll of economists increased to 200,000 from 190,000 earlier.

The odds of the hike in Fed's March 14-15 meeting has risen to 100 percent, according to futures rates tracked by Bloomberg.

Oil held losses near $50 a barrel as a record U.S. stockpiles overshadowed production cuts by the Organisation of Petroleum Exporting Countries and other nations.

In events to watch today, ECB President Mario Draghi is expected to keep quantitative easing going until the end of the year with underlying price pressures muted.