The market further extended losses and hit fresh intraday low in mid-morning trade. At 11:20 IST, the barometer index, the S&P BSE Sensex, was down 195.86 points or 0.54% at 36,383.10. The Nifty 50 index was down 71.10 points or 0.65% at 10,890.75. The Nifty slipped below 10,900 mark.
Key indices opened lower and extended losses as the session progressed. Negative cues from other Asian markets spoiled investors sentiment. Traders also booked profits after a five-session winning spree.
Among secondary barometers, the BSE Mid-Cap index was down 0.69%. The BSE Small-Cap index was down 0.63%.
The market breadth, indicating the overall health of the market, was weak. On BSE, 655 shares rose and 1410 shares fell. A total of 115 shares were unchanged.
Most IT shares declined. HCL Technologies (down 1.24%), MphasiS (down 1.1%), Infosys (down 0.84%), Tech Mahindra (down 0.83%), Hexaware Technologies (down 0.31%), TCS (down 0.29%) and Oracle Financial Services Software (down 0.16%), edged lower. MindTree (up 0.34%), Persistent Systems (up 0.4%) and Wipro (up 0.92%), edged higher.
Pharmaceutical shares were mixed. IPCA Laboratories (down 1.52%), Lupin (down 1.25%), Cipla (down 1.08%), Alkem Laboratories (down 0.49%), Strides Shasun (down 0.33%), Cadila Healthcare (down 0.23%) and Wockhardt (down 0.22%), edged lower. GlaxoSmithKline Pharmaceuticals (up 0.16%), Piramal Enterprises (up 0.36%), Divi's Laboratories (up 0.57%), Dr Reddy's Laboratories (up 0.62%), Glenmark Pharmaceuticals (up 0.63%) and Aurobindo Pharma (up 0.68%), edged higher.
Sun Pharmaceutical Industries jumped 4.96%. The company issued clarifications over alleged corporate governance lapses against the company that led to a selloff in its shares. Sun Pharma's distribution related to India domestic formulations business will be transitioned from Aditya Medisales, the current distributor, to a wholly owned subsidiary of Sun Pharma. This change will be made effective by Q1FY2020, post receipt of all requisite regulatory approvals. Further, Sun Pharma has initiated steps to induct S R B C & CO LLP, its statutory auditors, as auditors of subsidiaries that are currently audited by Valia & Timbadia. The company confirmed affirmatively that neither any loans nor guarantees have been given to Suraksha Realty. Sun Pharma would like to dispel all falsehoods being spread about its financial dealings.
As at 31st March 2018, Sun Pharma's consolidated balance sheet, reflected a liability towards obligation of supplies to Atlas Global Trading (Atlas) amounting to Rs 2,238 crore. This liability was in respect of Atlas assuming the damages on account of Protonix patent litigation settlement entered by Sun Pharma which was disclosed in Sun Pharma's Annual Report FY2014. In September 2014, Sun Pharma's Halol facility (Gujarat) was impacted by USFDA cGMP issues which were finally resolved in June 2018, after nearly 4 years. These cGMP non compliances resulted in supply constraints thereby, Sun Pharma was not able to adhere to the agreed supply schedule with Atlas.
Sun Pharma, in FY2018, has funded Atlas towards non-fulfilment of its supply obligations till the time such obligations are fulfilled as per the agreement. The said funding was included in Loans & Advances schedule of Sun Pharma's FY2018 consolidated balance sheet. The parties to the supply contract have now agreed in principle, that Atlas will assign its rights and obligations arising from this contract, to a wholly owned subsidiary of Sun Pharma. This assignment will ensure that the Loans & Advances given to Atlas will be settled. On conclusion of this transaction, in the consolidated balance sheet, this loan and the obligation will cease to exist as it gets squared up. This transaction is expected to be concluded in FY2019. The clarification was issued before trading hours today, 22 January 2019.
Overseas, Asian shares traded lower on Tuesday amid concerns about the global outlook, after the International Monetary Fund (IMF) slashed its world economic forecast on Monday. US market was closed on Monday in honor of Martin Luther King Jr. Day.
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IMF revised down its estimates for global growth on Monday, warning that the expansion seen in recent years is losing momentum. The Fund now projects a 3.5% growth rate worldwide for 2019 and 3.6% for 2020. These are 0.2 and 0.1 percentage points below its last forecasts in October -- making it the second downturn revision in three months.
IMF said India's economy is poised to pick up this year. IMF's World Economic Outlook Update, released yesterday by its chief economist Gita Gopinath in Davos, projected that India will grow at 7.5% this year and 7.7% in 2020, an impressive over one percentage point ahead of China's estimated growth of 6.2% in these two years.
The IMF attributed the pick up to lower oil prices and a slower pace of monetary tightening. IMF said India would remain one of the fastest growing major economies of the world.
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