Asian stock markets are lower today as Japanese and Hong Kong shares fall. The Nikkei 225 is off 0.2% while the Hang Seng is down 0.8%. The Shanghai Composite is trading down by 0.3%. US stocks were mixed on Wednesday, with the Nasdaq gaining on the strength of tech stocks while the S&P 500 was little changed as it marked its longest bull-market run.
Back home, India share markets have opened the day marginally higher. The BSE Sensex is trading up by 65 points while the NSE Nifty is trading up by 15 points. The BSE Mid Cap index and BSE Small Cap index both opened the day up by 0.2%.
The rupee is currently trading at 69.67 to the US$.
Sectoral indices have opened the day on a mixed note with healthcare stocks and FMCG stocks witnessing maximum buying interest. While, automobile stocks and metal stocks have opened the day in red.
To know what's moving the Indian stock markets today, check out the most recent share market updates here.
In the news from the economy. The Finance Ministry has warned chief executive officers (CEOs) of public sector banks (PSBs) to check their NPA accounts exceeding Rs 500 million for the possibility of any fraud or they could face criminal conspiracy charges.
The warning has been issued following allegedly siphoning off funds by Bhushan Steel's erstwhile promoter Neeraj Singal.
Reportedly, the bankers could be held accountable under Section 120B of Indian Penal Code if they fail to report fraud in an account which is later unearthed by investigating agencies.
If the investigating agencies find diversion of funds in those defaulting accounts, bankers may be liable to face criminal proceedings.
More than a dozen companies undergoing bankruptcy resolution are being reviewed by banks and investigating agencies for fraudulent activities including diversion of funds.
Indian banks are facing mounting non-performing assets (NPAs) or bad loans, especially at PSBs, which have reached over Rs 8 trillion. In addition, several banking frauds have been unearthed, including the Rs 140 billion scam at PNB, carried out allegedly by diamond jeweller Nirav Modi and his associates.
During the resolution process, the extensive audit of bankrupt companies has thrown up financial irregularities in several cases.
In June 2017, the Reserve Bank of India (RBI) had identified 12 stressed accounts, each having more than Rs 50 billion of outstanding loans and accounting for 25% of total NPAs of banks for immediate referral under the Insolvency and Bankruptcy Code (IBC). In August, RBI had sent a list of 28 more firms to lenders for resolution by December 2017.
Moving on to the news from the . As per an article in a leading financial daily, Lupin announced that it has received tentative approval for its Nudovra (Estradiol Valerate Tablets, 3 mg and 1 mg and Estradiol Valerate and Dienogest Tablets, 2 mg/2 mg and 2 mg/3 mg) Tablets from the United States Food and Drug Administration (FDA).
Lupin's Nudovra Tablets is the generic version of Bayer HealthCare Pharmaceuticals Inc.'s Natazia Tablets. It is indicated for use by women to prevent pregnancy.
Reportedly, Nudovra Tablets had annual sales of approximately US$ 31.4 million in the US (IQVIA MAT June 2018).
Speaking of the pharma sector, the BSE Healthcare Index has been on a roller coaster ride in the past few years. The period from 2012 to 2015 saw the index go up more than three times.
The Roller Coaster Ride of the BSE Healthcare Index
Since then it has been a painful ride downwards.
Pre-2015, pharma companies enjoyed a fairytale ride in the US market. Low labor costs, good chemistry skills, along with efficiency, ensured Indian companies could copy innovator drugs to make generic drugs at a fast pace.
The generic business had lucrative margins for all major pharma players. But the party did not last long. In the quest to supply drugs quickly, they compromised on quality at their manufacturing facilities.
No wonder, the USFDA took strict action. Sun Pharma received a warning letter for its Halol manufacturing facility in 2015. It was like a bolt out of the blue. Since then, the downward spiral began and has continued till date.
Lupin, was also issued a warning letter for two of its plants last year.
These regulatory issues coupled with price erosion in US markets has impacted the business of major pharma players.
Lupin share price opened the day up by 1.9%.
To know more about the company, you can access to Lupin's Q1FY19 result analysis and Lupin's 2017-18 Annual Report Analysis on our website. Meanwhile, you can also check our recently released annual result analysis of Ceat Ltd, Ashok Leyland, Wipro and MRF among others.
You can now also listen to our Indian Stock Market Wrapup. Just visit SoundCloud, iTunes or Stitcher and access our free weekly podcast. Happy listening!
This article was originally published in English at www.equitymaster.com
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