Pharma stocks in demand

A range bound movement was witnessed as key benchmark indices languished in positive zone in mid-morning trade. The gains were small. The barometer index, the S&P BSE Sensex was currently up 11.84 points or 0.04% at 28,271.98. The market breadth indicating the overall health of the market was quite strong, with almost two gainers for every loser on BSE. The BSE Small-Cap index was up 1.16%, outperforming the Sensex. Among the gainers from the constituents of the BSE Small-Cap index, gains ranged from 2.5% to about 16% for quite a few stocks

Meanwhile, a weaker-than-expected US jobs data released on Friday, 3 April 2015, has led to investors delaying expectations of an increase in the US Federal Reserve's key interest rate. Meanwhile, the outcome of a survey today, 6 April 2015, showed that growth in India's services sector moderated last month.

Pharma stocks gained on renewed buying. Sun Pharmaceutical Industries jumped after the company executed a settlement agreement with The Medicines Company USA regarding a generic version of Angiomax, Bivalirudin injection.

Earlier, key benchmark indices hit their highest level in almost two weeks at the onset of the trading session after opening with an upward gap.

The Reserve Bank of India (RBI) is widely expected to keep its benchmark lending rate viz. the repo rate unchanged at first bi-monthly Monetary Policy for 2015-16 scheduled tomorrow, 7 April 2015, as Governor Raghuram Rajan waits to see how RBI's recent rate cuts percolate through the country's financial system.

The government after trading hours on Wednesday, 1 April 2015, in its five-year Foreign Trade Policy 2015-20 (FTP 2015-20) announced the launch of a new Merchandise Exports from India Scheme (MEIS) for export of specified goods to specified markets. Meanwhile, the outcome of a survey on Thursday, 2 April 2015, showed that manufacturing activity in India witnessed an overall improvement last month.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 209.87 crore during the previous trading session on Wednesday, 1 April 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 197.25 crore on Wednesday, 1 April 2015, as per provisional data. The stock market was closed on 2 April and 3 April on account of holidays.

In the foreign exchange market, the rupee edged higher against the dollar.

Brent crude oil futures edged higher after Saudi Arabia raised prices for crude sales to Asia for a second month, signalling better demand in the region.

In overseas markets, Asian stocks rose after a dismal US jobs report led investors to pare bets the US Federal Reserve would hike interest rates anytime soon. US stock index futures fell after worse-than-expected US jobs data for March 2015 which was announced on Friday, 3 April 2015, when US stock market was closed on account of Good Friday.

At 11:16 IST, the S&P BSE Sensex was up 11.84 points or 0.04% at 28,271.98. The index jumped 107.44 points at the day's high of 28,367.58 in early trade, its highest level since 24 March 2015. The index fell 24.56 points at the day's low of 28,235.58 in early trade.

The CNX Nifty was up 1.85 points or 0.02% at 8,558.10. The index hit a high of 8,619.15 in intraday trade, its highest level since 24 March 2015. The index hit a low of 8,575.65 in intraday trade.

The BSE Mid-Cap index was up 78.56 points or 0.73% at 10,828.98. The BSE Small-Cap index was up 129.25 points or 1.16% at 11,275.97. Both these indices outperformed the Sensex.

The market breadth indicating the overall health of the market was quite strong, with almost two gainers for every loser on BSE. 1,446 shares gained and 732 shares fell. A total of 68 shares were unchanged.

Pharma stocks gained. Cipla (up 1.74%), Lupin (up 0.49%), Wockhardt (up 0.91%), Dr Reddy's Laboratories (up 1.46%), Strides Arcolab (up 0.9%), Shasun Pharmaceuticals (up 0.01%), Indoco Remedies (up 3.21%), Ipca Laboratories (up 0.71%), Glenmark Pharmaceuticals (up 3.32%), Elder Pharmaceuticals (up 4.99%), Divi's Laboratories (up 0.56%), and Cadila Healthcare (up 4.08%) gained.

Sun Pharmaceutical Industries rose after the company said that the company and certain of the company's subsidiaries have executed a settlement agreement with The Medicines Company USA settling the lawsuit filed against the company and the company's subsidiaries regarding submission of abbreviated new drug application (ANDA) by one of the company's subsidiaries, for a generic version of Angiomax, Bivalirudin injection. The stock rose 3.56%. This product is a direct thrombin inhibitor indicated for use as an anticoagulant. Under the terms of the settlement agreement, the company's subsidiary is entitled to launch its version of Angiomax in the United States on 30 June 2019, or earlier in certain limited circumstances. The agreement is subject to customary regulatory review, Sun Pharmaceutical Industries said. Sun Pharma made the announcement after market hours on Wednesday, 1 April 2015.

Aurobindo Pharma gained after the company said it received final approvals from the US Food & Drug Administration (USFDA) to manufacture and market Sildenafil Injection, 10mg/12.5ml (0.8mg/ml). The stock was up 3.39%. Sildenafil Injection 10mg/12.5ml (0.8mg/ml) is bio equivalent and therapeutically equivalent to the reference listed drug product (RLD), Revatio (sildenafil) Injection, 10 mg/12.5 ml (0.8 mg/ml), of Pfizer. Sildenafil Injection is indicated for the treatment of adult patients (18 years and above) with pulmonary arterial hypertension who are temporarily unable to take oral therapy, but are otherwise clinically and haemodynamically stable, Aurobindo Pharma said. The announcement was made on Saturday, 4 April 2015.

GAIL (India) rose 0.69%. The company said during market hours today, 6 April 2015, that during routine maintenance on GAIL's Vizag-Secunderabad LPG pipeline at Suryapet, Telangana, an unfortunate incident occurred on Saturday, 4 April 2015, in which two people including one GAIL employee and one contract employee lost their lives and three others injured. There is no loss to public property. The fatalities and injuries happened due to mechanical impact during normal pipeline pigging and cleaning operation. There was no fire or explosion in the incident. The operations were being carried out by TDW India, GAIL said in a statement.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.16, compared with its close of 62.49 during the previous trading session on 31 March 2015. The foreign exchange market was closed from 1 April to 3 April 2015.

Brent crude oil futures edged higher after Saudi Arabia raised prices for crude sales to Asia for a second month, signalling better demand in the region. Brent for May settlement was up 73 cents at $55.68 a barrel. While Saudi Arabia's state-run oil company Saudi Aramco Oil Co. raised price differentials for all its crude grades sold to Asia, it lowered most prices for the US, reflecting weaker Nymex crude prices and an oversupply in the US market.

Closer home, the Reserve Bank of India (RBI) is widely expected to keep its benchmark lending rate viz. the repo rate unchanged at first bi-monthly Monetary Policy for 2015-16 scheduled tomorrow, 7 April 2015, as Governor Raghuram Rajan waits to see how RBI's recent rate cuts percolate through the country's financial system. The RBI had surprised financial markets by announcing reduction in repo rate by 25 basis points to 7.5% in an unscheduled monetary policy review on 4 March 2015. Earlier, the RBI had on 15 January 2015 announced a cut in the repo rate by 25 basis points to 7.75%. Despite a cumulative rate cut of 50 basis points from the RBI, most commercial banks have refrained from cutting their lending rates.

The government after trading hours on Wednesday, 1 April 2015, in its five-year Foreign Trade Policy 2015-20 (FTP 2015-20) announced the launch of a new Merchandise Exports from India Scheme (MEIS) for export of specified goods to specified markets. For grant of rewards under MEIS, the countries have been categorized into 3 groups whereas the rates of rewards under MEIS range from 2% to 5%. MEIS has replaced 5 different schemes of earlier Foreign Trade Policy. Under the FTP 2015-20, Served from India Scheme (SFIS) has been replaced with Service Exports from India Scheme (SEIS) for increasing exports of notified services from India. Under SEIS, the selected services would be rewarded at the rates of 3% and 5%.

Growth in India's services sector moderated last month, the outcome of a survey showed today, 6 April 2015. The seasonally adjusted HSBC India Services Business Activity Index dropped to 53 in March 2015 from 53.9 in February 2015. The latest reading was indicative of a moderate rate of expansion that was slightly weaker than in the prior month. Anecdotal evidence highlighted sustained new business growth. Output rose in four of the six broad areas of the service economy, the exceptions being Financial Intermediation and Hotels & Restaurants. Service providers remain upbeat towards the prospects for business activity over the next 12 months. Over 25% of survey members anticipate output growth over the course of the next year, citing strengthening demand conditions.

Manufacturing activity in India witnessed an overall improvement last month, the outcome of a survey showed on Thursday, 2 April 2015. The headline HSBC India Purchasing Managers' Index (PMI) nudged higher at 52.1 in March 2015 from 51.2 in February 2015. Underpinning the expansion in output was a quicker rise in new order flows. There was a marked increase in input costs for manufacturing companies which has resulted in firms raising their tariffs once again. Markit economist Pollyanna De Lima said that greater cost burdens add to the pressure on margins which could potentially be squeezed by competitive pressures. Faster increases in incoming new work, buying levels and backlogs at manufacturing firms indicate that the subdued labour market is likely to recover in coming months, according to the survey.

Meanwhile, the government reportedly re-promulgated the land acquisition ordinance on Friday, 3 April 2015, after President Pranab Mukherjee gave his assent for the same. The ordinance will now be presented in both houses of parliament again. The ordinance includes nine amendments made when a bill to replace it was passed in the Lok Sabha last month. The second half of the Budget session of the parliaments begins on 20 April 2015 and concludes on 8 May 2015.

In overseas markets, Asian markets rose today, 6 April 2015, after a dismal US jobs report led investors to pare bets the US Federal Reserve would hike interest rates anytime soon. Key indices in Singapore, Indonesia and South Korea rose by 0.01% to 0.36%. Japan's Nikkei Average fell 0.25%. Chinese stock markets remain closed today, 6 April 2015. Markets in Australia and Hong Kong remain closed for Easter today, 6 April 2015. Hong Kong will also be closed tomorrow, 7 April 2015, for Ching Ming Festival.

In China, data on Friday, 3 April 2015, showed that a gauge of service sector activity, the HSBC China Services Purchasing Managers' Index, came in stronger at 52.3 in March 2015 from 52 in February 2015.

US stock index futures fell after worse-than-expected US jobs data for March 2015 which was announced on Friday, 3 April 2015, when US stock market was closed on account of Good Friday. Trading in US index futures indicates that the Dow Jones industrial average could slide 125 points at the opening bell today, 6 April 2015.

US employers added the fewest number of jobs in more than a year in March, the latest sign of weakness in the economy and one likely to further delay an anticipated interest rate increase by the Federal Reserve nonfarm payrolls rose 126,000 last month, less than half February's pace and the smallest gain since December 2013, the Labor Department said on Friday, 3 April 2015.

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