Pharma stocks edge higher

Intraday volatility continued as key benchmark indices alternately moved between positive and negative terrain in early afternoon trade. The barometer index, the S&P BSE Sensex, was currently down 6.17 points or 0.03%, off close to 130 points from the day's high and up about 30 points from the day's low. The market breadth, indicating the overall health of the market, was positive.

Pharma stocks gained. Dr. Reddy's Laboratories rose after the company said it has launched anti-bacterial Moxifloxacin generic in the US market on 4 March 2014. Most capital goods stocks gained.

The market edged higher in early trade on firm Asian stocks. The Sensex and the 50-unit CNX Nifty, both, hit their highest level in nearly six weeks. A bout of volatility was witnessed as key benchmark indices trimmed gains in morning trade. Intraday volatility continued as key benchmark indices recovered from lower level after giving away almost entire intraday gains in mid-morning trade. The Sensex slipped into the red later. Intraday volatility continued as key benchmark indices alternately moved between positive and negative terrain in early afternoon trade.

Foreign institutional investors (FIIs) bought shares worth a net Rs 185.61 crore on Tuesday, 4 March 2014, as per provisional data from the stock exchanges.

At 12:20 IST, the S&P BSE Sensex was down 6.17 points or 0.03% to 21,203.56. The index fell 33.57 points at the day's low of 21,176.16 in early afternoon trade. The index jumped 123.47 points at the day's high of 21,333.20 in early trade, its highest level since 24 January 2014.

The CNX Nifty was down 4.35 points or 0.07% to 6,293.60. The index hit a low of 6,287.80 in intraday trade. The index hit a high of 6,333.90 in intraday trade, its highest level since 23 January 2014.

The BSE Mid-Cap index was up 31.73 points or 0.48% at 6,597.32. The BSE Small-Cap index was up 9.72 points or 0.15% at 6,525.51. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1,187 shares gained and 1,168 shares fell. A total of 119 shares were unchanged.

Among the 30-share Sensex pack, 16 stocks fell and rest of them rose. Tata Power Company (down 2.94%), Bharti Airtel (down 1.48%) and Tata Motors (down 1.07%) edged lower from the Sensex pack.

Pharma stocks gained. Cipla (up 0.86%), Lupin (up 0.6%), Ranbaxy Laboratories (up 0.59%) and Sun Pharmaceutical Industries (up 0.27%) rose.

Dr. Reddy's Laboratories rose 0.95% after the company said it has launched anti-bacterial Moxifloxacin generic in the US market on 4 March 2014. The company made the announcement during trading hours today, 5 March 2014.

Dr. Reddy's Laboratories announced that it has launched Moxifloxacin Hydrochloride tablets, 400 milligram (mg), a therapeutic equivalent generic version of Avelox (Moxifloxacin HCI) tablets 400 mg in the US market on Tuesday, 4 March 2014, following the approval by the United States Food & Drug Administration (US FDA).

The Avelox (Moxifloxacin HCI) tablets brand had US sales of approximately $195 million for the twelve months period ended 31 December 2013 according to IMS Health data. Avelox tablets are used in adults for the treatment of infections of the lungs, airways and sinuses.

Dr. Reddy's Moxifloxacin Hydrochloride tablets, 400 mg is available in bottle counts of 30, the company said in a statement.

Most capital goods stocks gained. ABB (up 6.7%), Crompton Greaves (up 1.13%), L&T (up 0.19%), Punj Lloyd (up 1.17%) and Siemens (up 0.89%) gained. But, Bhel fell 0.78%.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.8675, compared with its close of 61.845/855 on Tuesday, 4 March 2014.

Private sector output across India rose for the first time in eight months during February. The seasonally adjusted HSBC India Composite Output Index posted 50.3 in February 2014, higher than 49.6 in January 2014, indicating a fractional rate of expansion. The latest growth was centred on the manufacturing sector, Markit Economics said in a statement. Adjusted for seasonal influences, the headline HSBC Services Business Activity Index rose from 48.3 in the previous month to 48.8 in February. This was consistent with a slight rate of contraction, and one that was the slowest in the current eight-month period of reduction, Markit Economics said. Where output declined, this was linked by survey respondents to lower levels of incoming new work and economic instability across the country. Sector data indicated that four of the six monitored categories recorded falling business activity, with the fastest decrease noted in Financial Intermediation.

February data highlighted an eighth consecutive monthly decline in new business placed with Indian services firms. That said, the pace of reduction eased to the weakest in that sequence and was marginal overall, Markit Economics said. Panellists reported weaker demand, a fragile economy and competitive pressures. Three of the six monitored sub-sectors registered lower new orders, namely Financial Intermediation, Renting & Business Activities and Transport & Storage. New business rose at a marked pace in the manufacturing economy, supporting growth across the private sector as a whole.

Staffing levels at service providers were broadly unchanged in February, with the index measuring employment posting only fractionally above the 50 no-change mark. Payroll numbers at manufacturers rose, albeit marginally. Concurrently, workforce numbers across the private sector as a whole were little-changed from those seen in January.

Indian service providers reported higher input prices in February 2014. The rate of cost inflation was solid, but eased since January and was weaker than the series average. Higher food, fuel and gold prices were cited by panellists as the main drivers of the rise in input costs. Input price inflation in the private sector accelerated to the strongest in four months, as manufacturers registered a sharp and accelerated increase. Reflective of sustained increases in costs, prices charged by services companies were raised further in February. Although the fastest in three months, the rate of charge inflation was moderate and below its average, Markit Economics said. Output prices in the private sector as a whole rose at a moderate pace that was unchanged from January.

Indian services companies maintained their positive outlook for output growth over the coming year, which they mainly linked to planned increases in marketing, forecasts of stronger demand and hopes of an overall improvement in economic conditions.

Commenting on the India Services PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said: "Service sector activity continued to stabilize, but the PMI reading remains below the water line and point to weak growth conditions. While inflation for input prices eased a bit, it picked up for prices charged as businesses passed on higher costs to clients. Despite the weak growth backdrop, the RBI will have to keep its inflation guards up to address lingering inflation pressures. Moreover, fiscal policy tightening to meet the deficit target will hold back government spending. This suggests that growth will remain subdued in coming months".

Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.

On the political front, the Election Commission today, 5 March 2014, announced the dates for 2014 Lok Sabha elections. The polls will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will be take place on 16 May 2014. With the announcement of poll dates, the Model Code of Conduct for governments and political parties comes into force with immediate effect. Therefore the Cabinet will no longer be able to take key decisions. Chief Election Commissioner VS Sampath said the dates have been decided keeping in view certain factors. "The parties brought to our notice a wide range of issues pertaining to security, revising the ceiling of poll expenditure, keeping the regional cultures and festivals in view while deciding dates," Sampath said.

The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh, including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.

An estimated 81.4 crore voters will be eligible to vote in the coming elections after 9.71 crore new voters have been added to the rolls since the last elections. From the coming elections, candidates in a Parliamentary constituency in bigger states can spend up to Rs 70 lakh on their campaign, up from Rs 40 lakh in 2011. In the 2009 elections, it was Rs 25 lakh.

The 2014 Lok Sabha elections will see the introduction of "None of the Above" (NOTA) option in voting, which came into vogue in the assembly elections a few months ago.

Meanwhile, geopolitical tensions over Ukrain eased after comments from Russian President Vladimir Putin on Tuesday, 4 March 2014, signaled the Ukraine crisis won't immediately escalate. Putin on Tuesday, 4 March 2014, said that he's not considering taking control of the Black Sea region of Crimea and would send troops into Ukraine only in extreme circumstances. Ukraine, a former Soviet republic, has been plunged into turmoil since protesters forced the ouster of the president last month. Russia keeps its Black Sea fleet in Crimea, where the majority language is Russian. Troops in the region have only been securing their bases and gunmen who have seized crucial infrastructure and surrounded military installations in the Crimea are acting independently, Putin said on Tuesday.

Meanwhile, US President Barack Obama on Tuesday said a Putin news conference earlier Tuesday was just a smoke screen to justify an illegal invasion.

Asian stocks edged higher on Wednesday, 5 March 2014, after comments from Russian President Vladimir Putin on Tuesday, 4 March 2014, signaled the Ukraine crisis won't immediately escalate and as China's leaders retained an economic growth target for this year. Key benchmark indices in Indonesia, Singapore, Japan, Taiwan and South Korea were up 0.16% to 1.2%. China's Shanghai Composite fell 0.8%. Hong Kong's Hang Seng shed 0.28%.

At the start of China's annual meeting of its legislature, the National People's Congress, Premier Li Keqiang today, 5 March 2014, said the government would keep its economic-growth target at 7.5% in 2014, unchanged from that of 2012 and 2013. Meanwhile, the consumer inflation target was set at 3.5%. The world's second-largest economy grew 7.6% in 2013, its slowest pace since 1999. Setting the target at 7.5% would strengthen market confidence, optimize economic structures, and protect jobs, Li said in his first "work report" to the legislature. "Growth is the key to solve all the key issues in our country. We have to hold firm to the focus of economic development in our work and maintain a proper economic growth rate," Li said.

Li said enacting reforms is his first priority even as he keeps an eye on growth. Idle factories will be shut, and work on a new environmental protection tax will be sped up to create a greener and more balanced economy powered by consumption rather than investment, he said. "Reform is the top priority for the government this year," Li told around 3,000 hand-picked delegates in a cavernous meeting hall in central Beijing.

The HSBC China services Purchasing Managers' Index rose to 51 in February from 50.7 in January, HSBC Holdings PLC said on Wednesday. A reading above 50 indicates expansion in service-sector activity, while a reading below that shows a contraction. "The HSBC China Services PMI suggests that service sector growth seems to be stabilising at a relatively low level. However, combined with the weaker manufacturing PMI, the overall strength of economic growth is moderating and this is starting to weigh on employment growth," HSBC chief economist for China Qu Hongbin said in a statement. "Beijing policy makers can and should fine-tune policy to avoid growth deceleration in the first half of the year," he added.

Shanghai Chaori Solar Energy Science & Technology Co, which makes solar cells and panels, announced late on Tuesday, 4 March 2014, that it may not be able to make an 89.8 million yuan ($14.6 million) interest payment in full on March 7, in what would be the first default of an onshore bond. The company plans to pay 4 million yuan to bondholders, the company said in a statement to the Shenzhen stock exchange yesterday. Its stock has been suspended from trade. A default would highlight strain in China's $4.2 trillion bond market after a trust product issued by China Credit Trust Co. was bailed out in January.

Australia's economy expanded faster than analysts forecast last quarter on rising household spending and lower savings, as the central bank's bid to spur consumption-led growth bears fruit. Fourth-quarter gross domestic product rose 0.8% from the previous three months.

Trading in US index futures indicated that the Dow could drop 16 points at the opening bell on Wednesday, 5 March 2014. US stocks surged on Tuesday, 4 March 2014, as fears of a confrontation between Russia and Ukraine eased and Russian President Vladimir Putin said there was no need to use military force in the Crimea region for now.

The US economy will grow this year at its fastest pace since 2005, helping reduce the annual average unemployment rate for a fourth straight year even as market borrowing costs rise, the President Barack Obama administration predicted. Gross domestic product will expand 3.1% in 2014 after rising 1.9% last year, the administration said in forecasts accompanying its 2015 budget plan released in Washington. The jobless rate will average 6.9% this year, compared with 7.4% last year, and average 6.4% in 2015, according to estimates based on information as of mid-November.

The $3.9 trillion spending request anticipates an accelerating economy that's boosting employment while moving up inflation to levels unlikely to concern Federal Reserve policy makers. The proposal says fixing the immigration system, investing in infrastructure, simplifying the tax code and improving job training would reduce the ranks of the unemployed even more.

The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion.

In Europe, a monthly meeting of the Governing Council of the European Central Bank (ECB) is scheduled tomorrow, 6 March 2014, in Frankfurt to decide euro zone interest rates.

A two-day meeting of Bank of England's Monetary Policy Committee (MPC) begins today, 5 March 2014, to decide interest rates in UK. Policy rates are expected to remain unchanged at record low. The UK's central bank slashed interest rates to record low of 0.5% at the height of the financial crisis in 2009.

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