Market snaps six-day winning streak

Caution ahead of the release of minutes from the US Federal Reserve's latest meeting pulled key Indian benchmark indices lower. After remaining in red almost throughout the trading session, key indices extended losses in late trade. The barometer index, the S&P BSE Sensex, was provisionally down 132.74 points or 0.5% at 26,287.93. The market breadth indicating the overall health of the market was positive. European stocks fell after minutes of Bank of England's latest policy meeting showed two members voted for interest-rate hike. Asian stocks rose after strong US housing data lifted US stocks on Tuesday, 19 August 2014. However, the gains for key indices in Asia were small. Brent crude rose after hitting 14-month low yesterday, 19 August 2014. Pharma stocks saw across the board gains, with shares of Cipla, Glenmark Pharmaceuticals, Lupin and Cadila Healthcare hitting record high. Shares of a number of second line pharma stocks rose. Shares of Oriental Bank of Commerce and Dena Bank dropped after both the banks issued separate clarification regarding misappropriation of funds at Mumbai branch.

Key indices had slipped into the red shortly after a higher opening triggered by overnight gains in US stocks and lower crude oil prices took the 50-unit CNX Nifty to record high.

Key indices snapped six-day winning streak today, 20 August 2014.

As per provisional figures, the S&P BSE Sensex was down 132.74 points or 0.5% at 26,287.93. The index fell 143.06 points at the day's low of 26,277.61 in late trade, its lowest level since 18 August 2014. The index rose 83.85 points at the day's high of 26,504.52 at the onset of the trading session.

The CNX Nifty was down 30.05 points or 0.38% at 7,867.45, as per provisional figures. The index hit a low of 7,864.05 in intraday trade, its lowest level since 18 August 2014. The index hit a high of 7,922.70 in intraday trade, lifetime high for the index.

The total turnover on BSE amounted to Rs 3107 crore, slightly lower than Rs 3140.59 crore on Tuesday, 19 August 2014.

The market breadth indicating the overall health of the market was positive. On BSE, 1,689 shares gained and 1,289 shares fell. A total of 109 shares were unchanged.

The BSE Mid-Cap index was up 5.48 points or 0.06% at 9,276.34. The BSE Small-Cap index was up 94.71 points or 0.93% at 10,263.51. Both these indices outperformed the Sensex.

Pharma stocks saw across the board gains. Lupin gained 2.33% to Rs 1,244.85 after hitting record high of Rs 1,250.80 in intraday trade.

Cipla rose 3.35% to Rs 489.85 after hitting record high of Rs 496.40 in intraday trade.

Among other pharma stocks, Ranbaxy Laboratories (up 4.84%) and Sun Pharmaceutical Industries (up 4.88%) gained.

Dr Reddy's Laboratories rose 2.23% after a filing with the US Securities and Exchange Commission on Monday, 18 August 2014, showed market share gained in key drugs for the company in the US market. Dr Reddys Laboratories said global generics segment's revenues from North America (the United States and Canada) rose 51% to Rs 1646.80 crore in the three months ended 30 June 2014 over the three months ended 30 June 2013. In US dollar absolute currency terms (i.e., US dollars without taking into account the effect of currency exchange rates), such revenues increased by 43% in the three months ended 30 June 2014 as compared to the three months ended 30 June 2013.

This growth was largely attributable to revenues from new products launched between 1 July 2013 and 30 June 2014, such as decitabine, azacitidine and divalproex sodium ER; and gain in market shares of existing products, such as metoprolol succinate, fexofenadine, atorvastatin and ziprasidone.

The company said its global generics segment's revenues from Russia for the three months ended 30 June 2014 were Rs 419.80 crore, an increase of 15% as compared to the three months ended 30 June 2013.

The company's global generics segment's revenues from 'Rest of the World' markets were Rs 221.60 crore for the three months ended 30 June 2014, an increase of 50% as compared to the three months ended 30 June 2013. The growth was primarily attributable to sales volume growth in Venezuela and new products launched between 1 July 2013 and 30 June 2014.

The company's global generics segment's revenues from Europe were Rs 145.90 crore for the three months ended 30 June 2014, a decline of 7% as compared to the three months ended 30 June 2013. Revenues have declined primarily on account of reduced sales in Germany, which was mainly due to company's reduced participation in the competitive bidding tenders sponsored by statutory health insurance funds and other health insurance providers.

Glenmark Pharmaceuticals rose 1.04% to Rs 726.90 after a wholly owned subsidiary announced the discovery and initiation of IND enabling studies of a novel clinical development candidate, GBR 1302. The stock hit record high of Rs 749.05 in intraday trade. The announcement was made before market hours today, 20 August 2014. Glenmark Pharmaceuticals S.A. (GPSA), a wholly owned subsidiary of Glenmark Pharmaceuticals (GPL), announced the discovery and initiation of IND enabling studies of a novel clinical development candidate, GBR 1302, a HER2xCD3 bispecific antibody. GBR 1302 was discovered and developed by the Glenmark Biologics Research Centre located in La Chaux-de-Fonds, Switzerland. GBR 1302 is based on Glenmark's innovative BEAT antibody technology platform which facilitates the efficient development and manufacture of antibodies with dual specificities, so-called bispecific antibodies. GBR 1302 is the first clinical development candidate based on the BEAT technology. Glenmark expects to obtain approval for the initiation of clinical studies during this financial year.

Cadila Healthcare rose 1.17% to Rs 1,206 after scaling a record high of Rs 1,239 in intraday trade. Cadila Healthcare during market hours said that the company has received the final approval from the US Food and Drug Administration (USFDA) to market Acyclovir tablets in the strengths of 400 mg and 800 mg. The drug falls under the anti-viral segment, Cadila Healthcare said. Sales of Acyclovir Tablets are estimated at $55.8 million in the United States in 2014, as per IMS. Cadila Healthcare now has 95 approvals and has so far filed 249 Abbreviated New Drug Application (ANDAs) since the commencement of the filing process in FY 2003-04, the company said.

Second line pharma stocks also participated in the rally. Indoco Remedies (up 12.35%), Orchid Chemicals & Pharmaceuticals (up 7.54%), Granules (India) (up 5.89%), Alembic Pharmaceuticals (up 6.04%), Shasun Pharmaceuticals (up 13.71%), Dishman Pharmaceuticals & Chemicals (up 2.3%), FDC (up 11.2%), Amrutanjan Healthcare (up 10.85%), Kopran (up 12.01%) and Elder Pharmaceuticals (up 11.43%) surged.

Venus Remedies jumped 5.66% after the company said it received marketing authorisation from Swiss drug authority for anti-cancer drug Gemcitabine. The company made the announcement during trading hours today, 20 August 2014. Venus Remedies said it received its first marketing authorization (MA) in Switzerland from Swiss drug authority (Swissmedic) for Gemcitabine 200 milligram (mg) & 1 gram injection through Venus Pharma GmbH. This market approval of critically important oncology drug Gemcitabine injection will help Venus to strengthen its oncology portfolio. The company is planning to launch this product in early next quarter within this fiscal year to expand its presence in the oncology space. Venus Pharma GmbH the German subsidary will carry out complete analysis of the goods. The product will be launched in Switzerland market by Swiss Pharma GmbH with whom Venus has a marketing tie up, the company said in a statement.

Shares of Oriental Bank of Commerce dropped 3.63% and Dena Bank dropped 4.58% after both the banks issued separate clarification regarding misappropriation of funds at Mumbai branch..

Dena Bank clarified during market hours that it has suspended the erring Branch Manager of Malabar Hill Branch and transferred the staff of the concerned branch after the funds were surreptitiously transferred out of the bank by creating fake overdraft facility, resulting in a fraud on the bank and the concerned entities/government organizations. The bank has lodged complaint in this regard with CBI. The Malabar Hill Branch of the bank received bulk Term Deposits from various Entities/Govt. Organisations between 30 January 2014 and 5 May 2014. Subsequently, Term Deposits amounting to Rs 256.69 crore were pledged to the Bank by the same signatories to obtain overdraft facilities of (Rs 223.25 crore) (Present outstanding Rs 217.17 crore). The bank has made a provision of Rs 54.29 crore during the quarter ended 30th June 2014 and the balance to be provided equally in subsequent three quarters of FY 2015. An appropriate disclosure was made at point No. 6, in Notes to Accounts in the SEBI format containing unaudited reviewed financial results for the quarter ended 30th June, 2014.

Oriental Bank of Commerce (OBC) said during market hours that Jawaharlal Nehru Port Trust (JNPT) lodged a complaint with the CBI and the case is under investigation after the non receipt of Term deposit receipt (TDR) from the bank. The bank initiated departmental action against the erring officials. The bank reported the matter to the RBI as well as the Department of Financial Services, Ministry of Finance. The disclosure in this regard was made by the bank in Financial accounts of Q1 June 2014. Jawahar Lal Nehru Port Trust (JNPT) had placed funds aggregating Rs.180 crore with the bank initially for the purpose of term deposit in two tranches in February 2014. These funds were surreptitiously transferred out of the bank upon instructions of the same signatory/constituent.

Dena Bank and OBC issued clarification after news reports said that the finance ministry has unearthed misappropriation of funds to the tune of Rs 436 crore by Mumbai-based branches of OBC and Dena Bank.

In the foreign exchange market, the rupee was a tad higher against the dollar. The partially convertible rupee was hovering at 60.628, compared with its close of 60.685 on Tuesday, 19 August 2014.

India's macroeconomic worries have eased on falling crude oil prices. India imports about 80% of its crude oil requirement. The October Brent crude contract was up 54 cents at $102.10 a barrel. The contract fell 4 cents a barrel to settle at $101.56 a barrel yesterday, 19 August 2014, after falling to $101.07, the lowest since June 2013.

European stocks fell today, 20 August 2014, after minutes of Bank of England's latest policy meeting showed two members voted for interest-rate hike. Key benchmark indices in UK, France and Germany were down 0.19% to 0.54%.

The Bank of England (BOE) in its minutes from August policy meeting published in London today, 20 August 2014, said the policy makers were split on rate increase. The push for a rate rise by Martin Weale and Ian McCafferty, two external members of the nine-member Monetary Policy Committee, will reinforce expectations that the BOE remains on course to lift borrowing costs early next year.

Asian stocks rose today, 20 August 2014, after strong US housing data lifted US stocks on Tuesday, 19 August 2014. Key benchmark indices in Japan, Taiwan, Singapore, Hong Kong, South Korea and Indonesia were up 0.03% to 0.48%. China's Shanghai Composite fell 0.23%.

Trading in US index futures indicated that the Dow could fall 21 points at the opening bell on Wednesday, 20 August 2014. US stocks ended higher for the second straight session on Tuesday, 19 August 2014, after a better-than-expected jump in July housing starts and upbeat earnings reports.

Housing starts posted their strongest rebound in eight months in July, topping expectations and adding another data point to suggest optimism is returning among homebuilders.

The minutes from the last Federal Open Market Committee meeting will be released today, 20 August 2014, which could give more hints on the first rate hike in the world's largest economy. Federal Reserve Chairwoman Janet Yellen will give a speech on Friday, 22 August 2014, at the annual Fed summit in Jackson Hole, Wyo.

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