Key indices were trading with modest losses in mid-morning trade. The Nifty held above the 11,900 mark. Pharma shares witnessed selling pressure. At 11:26 IST, the barometer index, the S&P BSE Sensex, was down 87.45 points or 0.21% at 40,619.86. The Nifty 50 index lost 34.50 points or 0.29% to 11,903.15.
Domestic shares mirrored weakness in other Asian markets. Investor sentiment was hit after US President Donald Trump on Wednesday accused Democrats of being unwilling to craft an acceptable compromise on stimulus, following reports of progress earlier in the day.
In the broader market, the S&P BSE Mid-Cap index was trading flat while the S&P BSE Small-Cap index rose 0.13%.
The market breadth was almost even. On the BSE, 1146 shares rose and 1101 shares fell. A total of 144 shares were unchanged.
Coronavirus Update:
India reported 715,812 active cases of COVID-19 infection and 116,616 deaths while 6,874,518 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India. Total COVID-19 confirmed cases worldwide stood at 41,171,093 with 1,130,597 deaths, according to data from Johns Hopkins University.
Buzzing Index:
The Nifty Pharma index fell 2.35% to 11,371.60. The index added 0.25% in the past two sessions.
Dr. Reddy's Labs (down 3.34%), Cipla (down 2.18%), Lupin (down 2.07%), Biocon (down 2.02%), Cadila Healthcare (down 1.75%), Sun Pharma (down 1.42%), Divi's Labs (down 1.4%), Torrent Pharma (down 1.16%), Alkem Laboratories (down 0.94%) declined.
Aurobindo Pharma tumbled 5.23% to Rs 763.20. The company's wholly-owned step-down subsidiary, AuroLife Pharma LLC, received a warning letter from the US drug regulator for its oral solid manufacturing facility situated at Dayton, New Jersey.
This letter follows the earlier letter dated 4 June 2020 issuing a Official Action Indicated (OAI) status for this facility. The company assured that the existing business from this facility will not be impacted. The company also said it will be engaging with the regulator and is fully committed in resolving this issue at the earliest.
Granules India shed 0.39% to Rs 384. The company said that it had received marketing approval from the US Food and Drug Administration (USFDA) for potassium chloride extended release tablets USP, 10 mEq (750 mg) and 20 mEq (1500 mg) for the treatment of patients with hypokalemia. Granules' tablet product is bioequivalent to the reference listed drug (RLD), K-Dur.
According to IQVIA Health, potassium chloride extended release tablets USP, 10 mEq & 20 mEq, had US generic sales of approximately $204 million for the most recent twelve months ending in August 2020.
Global Markets:
Asian markets edged mostly lower on Thursday amid continuing uncertainty over U.S. coronavirus stimulus.
The IMF on Wednesday downgraded its forecast for Asia-Pacific to a negative 2.2% in 2020. Jonathan D. Ostry, IMF's acting director of the Asia and Pacific Department, said: Our latest Regional Economic Outlook shows that a recovery started in the third quarter, but growth engines are not all firing with the same power across countries, leading to a multispeed recovery.
The US stock market finished lacklustre session lower on Wednesday, 21 October 2020, as investors weighed the latest developments in reaching a stimulus agreement. Rising coronavirus cases on both sides of the Atlantic and a busy earnings day were also grabbing investor attention.
Traders kept an eye on the latest developments in Washington, as lawmakers try to reach an agreement on a new stimulus bill. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed to reach a deal before a Tuesday deadline and now aim to finalize a proposal before the weekend.
Wall Street's fear gauge touched a one-month high earlier on Wednesday as the U.S. election campaign enters its final stretch. President Donald Trump and Democratic challenger Joe Biden will face off in their second and final debate on Thursday night where Trump will attempt to change the trajectory of a race that Biden is leading, according to national polls.
Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.
The Fed's Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, noted the pace of economic growth characterized as slight to modest in most districts. The report said manufacturing activity generally increased at a moderate pace, while residential housing markets continued to experience steady demand for new and existing homes. Banking contacts also cited increased demand for mortgages as the key driver of overall loan demand, the Fed said.
The Fed said commercial real estate conditions continued to deteriorate in many districts, with the exception being warehouse and industrial space where construction and leasing activity remained steady. The report also said consumer spending growth remained positive, but some districts reported a levelling off of retail sales and a slight uptick in tourism activity.
Employment increased in almost all districts, the Fed said, although growth remained slow. Job gains were reported most consistently for manufacturing firms, but firms continued to report new furloughs and layoffs.
On the inflation front, the Beige Book said prices rose modestly across districts since the previous report. Input costs generally increased faster than consumer prices, although some sectorsnotably construction, manufacturing, retail, and wholesalepassed along the higher costs to consumers.
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