India: Markets Close With Mixed Cues

 |  Includes: EPI, IFN, IIF
by: Equitymaster

Although markets closed well above the dotted line, they remained volatile in the final hours of trade on account of alternate bouts of buying and selling. While stocks from the software and banking sectors found favour, stocks from the realty and power sectors were at the receiving end. As regards global markets, while the Asian indices closed in the positive, the European indices have also opened on a positive note.

The BSE Sensex closed almost 250 points higher, while the NSE Nifty closed higher by 50 points. However, the BSE Midcap and Smallcap indices closed in the red, each down by 1%. The rupee was trading at 48.86 to the dollar.

After closing at a historic two-year low last Friday, the Indian benchmark indices began the week's proceedings on a positive note tracking their Asian peers. Thereafter, markets continued to gain strength till the mid session.

During the mid-session, RBI announced a 1% cut in repo rate to infuse further liquidity into the system. RBI also stated that, due to financial integration, the uncertainty is transmitting to countries outside the epicenter of the crisis.

The central bank's statement raised concerns among the participants who choose to book profits at higher levels. The markets closed well above the dotted line as buyers edged over sellers in the final hour of trade. While Wipro (up 9%) and TCS (up 8%) led the pack of gainers on the BSE Sensex today, Grasim and BHEL (each down 8%) led the pack of losers.

As per a leading business daily, Cadila Healthcare has received approval from the US Food & Drug Administration to market multiple doses of Risperidone tablets. The company would market the drug in the strengths of 0.25 mg, 0.5 mg, 1 mg, 2 mg, 3 mg and 4 mg.

Risperidone, used to treat schizophrenia and bipolar disorder, is the generic version of Janssen's Risperdal[R]. As per IMS healthcare, the drug had annual sales in the US of approximately US$ 2.7 bn for the 12 months ended June 30, 2008. With this approval the group has now 41 approvals and has so far filed 79 Abbreviated New Drug Application [ANDAs]. This approval will enable the company to bolster its revenues from the highly competitive US generics markets. The stock (marginally up), along with its peers Ranbaxy (up 1%), Dr. Reddy's (up 3%) and Lupin (up 4%), closed in the positive.

Indian Hotels announced its 2QFY09 results today. The company's topline grew by 8% YoY each in 2QFY09 and 1HFY09. The costs grew at a faster pace compared to topline resulting in 4.5% and 2.6% contraction in EBITDA margins in 2QFY09 and 1HFY09 respectively.

The subdued performance at the operating level boiled down to the bottomline which declined by 4.8% YoY in 2QFY09. In 1HFY09, the company reported a tepid growth of 3.6% YoY in net profits. However, if one excludes the extraordinary item during both the periods, the bottomline is up 13% YoY during 2QFY09 and 18% YoY for 1HFY09. The stock, along with its peers Hotel Leelaventure and EIH closed lower by 2%.