Thursday August 23, 02:30 PM
Profit booking continues... |
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By Equitymaster.com
Continued selling in heavyweights has led to the Nifty turning negative during the previous hour of trade while Sensex is still trading in the positive, albeit at much lower levels. Posting the biggest losses are stocks like Cipla (down 4%), HCL (HCLL.BO, news) Tech (down 3%) and Zee (down 3%). On the other hand, cement and select software stocks are still trading in the positive. On the overall NSE too, 60% of the stocks are trading in the red currently.
The BSE Sensex is trading at 14,276 (up 28 points) while the NSE Nifty is trading at 4,148 (down 4 points). The rupee is trading at 41.1 to the dollar.
Domestic pharma majors are mostly trading strong on the bourses currently with leading gainers being Glenmark (up 2%), Wockhardt (up 2%) and Dr Reddy (up 1%). The optimism could be on the back of a recent report released by the global consulting firm, McKinsey. As per the report, the market for domestic pharmaceuticals could triple from the current levels and reach US$ 20 bn by 2015. The growth of this magnitude will be next only to the US and China. Higher affordability of medical care, better medical infrastructure, greater awareness of health insurance and acceptance of patented products are some of the key factors that would drive this growth. However, this might not bode well for the domestic companies if they do not pull up their sleeves and in effect, might lose market share to foreign MNCs, who will be in a position to launch patented products.
Commodity majors are trading mixed with Hindalco (HALC.BO, news) up by 1%, while Tata Steel (TISC.BO, news) is trading 2% lower currently. Stocks of these two companies have taken a bit of a pounding in the last one month, placing them among the top losers on the Nifty. While some of the concerns were related to metal prices, the bigger impact was felt due to the recent sub prime meltdown in the US markets. With both of these companies taking up substantial debt to fund their recent huge acquisitions, it was being felt that interest liabilities might rise considerably for them, thus putting pressure on cash flows. While the extent of damage is hard to ascertain, the long term prospects look bright given the integrated nature of their operations and cost advantages.
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