Sensex, Nifty indecisive: Thursday Closing Report

The market is getting oversold but for a bounce, the Nifty has to close above any previous day’s high. Instead it is still making lower lows

Across the board institutional selling, which began in the second half of trade was seen as the main reason for the market decline today. Yesterday we had mentioned that the Nifty closing above previous day's high could result in a possible change of direction. We continue to maintain that stance. However, if the index continues to make lower lows, it may see fresh lows for the year. The National Stock Exchange (NSE) saw a lower volume of 63.85 crore shares.

The market opened in the positive as investors resorted to bargain hunting after two days of losses. Buying in banking, oil & gas, auto, capital goods and fast moving consumer goods sectors supported early gains. The Nifty opened nine points up at 4,984 and the Sensex resumed trade at 16,516, a gain of 36 points over its previous close.

On the global front, markets in the US closed weak on Wednesday on fresh European worries. The Asian pack was mostly down in early trade today on weak Chinese trade data for the month of April on the back of sluggish export demand.

Brushing aside the negative global cues, the Indian market continued to move higher and hit its intraday high around 12.30pm with the Nifty going up to 5,039 and the Sensex rising to 16,672

However, the benchmarks came off their highs as selling pressure in auto, metal and technology stocks intensified. The indices touched their lows in the post-noon session on a lacklustre opening by the key European markets. At the lows, the Nifty fell to 4,954 and the Sensex went back to 16,400.

The market bounced back from the lows but closed with a minor loss. The Nifty lost nine points at 4,966 and the Sensex fell by 60 points to settle at 16,420.

The advance-decline ratio on the NSE was 686:954.

The broader indices witnessed a mixed close with the BSE Mid-cap index gaining 0.06% and the BSE Small-cap index falling by 0.24%.

Barring the BSE Oil & Gas index (up 0.62%) and the BSE Consumer Durables index (up 0.31%), all other sectoral gauges ended in the red. The top losers were BSE Metal (down 1.02%); BSE Auto (down 0.89%); BSE Power (down 0.75%); BSE Healthcare (down 0.33%) and BSE Fast Moving Consumer Goods (down 0.25%).

DLF (up 2.25%; BHEL (up 1.46%); ONGC (up 1.27%); Mahindra & Mahindra (up 0.93%) and Cipla (up 0.91%) topped the Sensex list today. The losers were led by Maruti Suzuki (down 3.18%); Jindal Steel (down 2.68%); State Bank of India (down 2.32%); Hero MotoCorp (down 1.53%) and Coal India (down 1.50%).

The top gainers on the Nifty were Cairn India (up 3.87%); IDFC (up 2.78%); BPCL (up 2.62%); Axis Bank (up 2.48%) and DLF (up 2.31%). The key losers were Maruti Suzuki (down 3.54%); Jindal Steel (down 3.46%); Ranbaxy (down 3.12%); Punjab National Bank (down 2.14%) and Asian Paints (down 1.99%).

Markets in Asia settled mixed on weaker-than-expected trade data from China and the continuing debt problems in Europe. Worries that Greece exiting the Eurozone would lead to more problems made investors nervous.

The Shanghai Composite added 0.07%; the Jakarta Composite rose 0.11%; the KLSE Composite gained 0.20%; the Straits Times climbed 0.09% and the Taiwan Weighted advanced 0.11%. On the other hand, the Hang Seng declined 0.51%, the Nikkei 225 closed 0.39% lower and the KOSPI Composite lost 0.27%.

Back home, foreign institutional investors were net sellers of shares totalling Rs376.34 crore on Wednesday while domestic institutional investors were net buyers of stocks amounting to Rs162.37 crore.

SKS Microfinance has decided to close down 78 branches in Andhra Pradesh (AP) and retrench around 1200 employees. SKS Micro employs 3400 people across 180 branches in the state. The company added that it was willing to welcome back its staff when situation in AP improves. The stock added 0.06% to close at Rs88.75 on the NSE.

Wind energy major Suzlon Energy said its subsidiary REpower Systems had bagged a 39 MW order from Poland-based RWE Innogy. The project is scheduled for commissioning by early 2013 and has the potential to generate enough power to meet the needs of more than 50,000 homes every year. The stock tumbled 5.37% to close at Rs19.40 on the NSE.

Strides Arcolab has received ANDA approval from USFDA for Acetazolamide Injection USP, 500 mg/vial (preservative free) in lyophilized format. Acetazolamide is used for adjunctive treatment of edema due to congestive heart failure; drug-induced edema; centrencephalic epilepsies; chronic simple glaucoma, secondary glaucoma, and preoperatively in acute angle-closure glaucoma.

According to IMS, the 2011 US market for Injectable Acetazolamide approximates to $10 million with only one active player. Strides declined 0.72% to close at Rs687.40 on the NSE.


Cadila Q4 net dips 4.5% to Rs171 crore on forex losses

Total revenues of pharma company rose to Rs1,398 crore during the March quarter

New Delhi: Cadila Healthcare on Thursday reported a 4.5% decline in its consolidated net profit at Rs170.88 crore for the quarter ended March 2012, mainly on account of foreign exchange losses, reports PTI.

The company had posted a net profit of Rs 178.97 crore for in the same quarter last fiscal, Cadila Healthcare said in a filing to BSE. However, the total revenues of the company rose to Rs1,398 crore for the reported quarter against Rs1,213.31 crore for the corresponding period previous fiscal.

For FY12, the company's Board of Directors has recommended a dividend of Rs7.50 per share, Cadila said.

The financial results include loss of Rs9 crore in the fourth quarter on account of foreign exchange fluctuations against gain of Rs31.22 crore in the corresponding quarter previous fiscal.

Consolidated net profit for the year ended March 2012 stood at Rs652.59 crore as against Rs711 crore for Fiscal 2010-11. Its total revenues rose to Rs5,263.31 crore for the full year from Rs4,630.59 crore in the previous fiscal, Cadila said.

During the quarter under consideration the group's India formulations business posted sales of Rs499 crore while its formulation export to US also registered robust growth, it added.

"During the quarter the group also entered into an agreement with Microbix Biosystems Inc...To market the Thrombolytic drug, Urokinase in the American markets," Cadila Healthcare said.

During the quarter the group's wellness business stood at Rs86 crore and animal healthcare business posted sales of Rs43 crore, it added.

The company filed eight abbreviated new drug applications (ANDAs) during the quarter to take the total filings to 148, it added.

Shares of Cadila Healthcare closed Thursday at Rs757 apiece on BSE, up 3.11% from its previous close.


Economy & Nation Exclusive
Cipla breached patent rights alleges Bayer

While the German pharma company is accusing Cipla for breaching its patents rights by slashing price, in March, the Indian government stripped Bayer it its exclusive rights to sell Nexavar used in treatment of kidney and liver cancer

German pharmaceutical company Bayer said Indian generic drug maker Cipla had breached its patent rights by slashing the price of a generic version of its patent-protected cancer drug Nexavar last week.

Bayer Pharma has not given its consent to Cipla to launch its generic Sorafenib (sold under the brand name Nexavar) and the latter's decision to cut the price of the life-extending kidney and liver cancer drug "is a clear patent infringement," a Bayer spokesperson told PTI.

Bayer holds the patent for Nexavar till 2020 and it will "vigorously defend its patent within the available legal framework," the spokesperson said.

Last week Cipla slashed prices of its generic drugs used in treating cancers of brain, lung and kidney by up to 76%. The price of 'Soranib' used for treating kidney cancer was cut by 76% to Rs1,710 "for a month's therapy", from Rs6,990, Cipla had said in a statement.

In March, India stripped Bayer of its exclusive rights to sell Nexavar, a treatment for kidney and liver cancer, granting Natco Pharma a license to sell the generic drug at Rs8,880 ($170) for a monthly dose. Bayer sells the branded Nexavar at Rs2.84 lakh a month.

The Delhi High Court is already dealing with a patent infringement suit filed by Bayer against the Indian company on 15 March 2010, in response to a decision of the Drug Controller General of India (DCGI) to grant Cipla marketing authorisation for a generic version of Nexavar.

The next hearing to decide the course of the proceedings is scheduled for 14 August 2012, the spokesperson said.

Bayer Pharma also confirmed that it has launched a legal challenge to the compulsory licence issued by India in March this year to domestic drugmaker Natco Pharma to manufacture and sell a low-cost generic copy of Nexavar.

An appeal against the decision of the Controller General of Patents, Designs and Trademarks to grant a compulsory licence for Nexavar was filed with the Intellectual Property Appellate Board (IPAB) on 4th May, it said in a press statement.

The order of the Indian patents office "damages the international patent system and endangers pharmaceutical research," the statement said.

"We will vigorously continue to defend our intellectual property rights, which are a prerequisite for bringing innovative medicines to patients."

The challenges faced by India's healthcare system have little or nothing to do with patents on pharmaceutical products as all products on India's essential drugs list are not patented, Bayer said.

Last week Cipla cut prices of its various generics used in the cancel treatment. Following the reduction, its brain cancer drug 'Temoside' in 250 mg strength is now available at Rs5,000 against Rs20,250 earlier. While lung cancer drug 'Gefticip 250 mg' in packs of 30 tablets is priced at Rs4,250 against Rs10,200.

Cipla's brain cancer drug 'Temoside' in the strengths of 20 mg, 100 mg, and 250 mg is now be available at Rs480, Rs2,400, and Rs5,000, respectively, for a pack of five capsules. The earlier prices of these drugs were Rs1,875, Rs8,900 and Rs20,250, respectively.

Cipla is one of the biggest players in Indian formulations market with about 5.7% market share. Key therapies for the company in the domestic space include respiratory, anti-infectives, cardiac, gynaecology and GI. It enjoys 70% market share in inhaler segment and its key brands in this segment are Seroflo, Foracort, Budecort and Aerocort.

In the export space, Cipla has been working on a low-risk, low margin partnership model, which restricts any margin-upside in the US and EU market. However, the company is consciously changing its policy towards a more profitable model for the same. It is now focusing on the inhaler opportunity, which is expected to yield significant profitability, going ahead.

Cipla closed 0.91% higher at Rs325.55 on the Bombay Stock Exchange, while the benchmark Sensex settled marginally down at 16,420.


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