The Indian stock market languished in the red throughout the trading session today on the back of persistent selling pressure across index heavyweights. There was no respite in the final trading hour either and the indices closed well below the dotted line. While the BSE-Sensex closed lower by around 364 points (down 2%), the NSE-Nifty closed lower by around 109 points (down 2%). The BSE Midcap and BSE Small-Cap were not spared either as they closed lower by 3% each. Losses were largely seen in oil and gas, metal and auto stocks.
As for global markets, Asian indices closed mixed today while European indices opened in the red. The rupee was trading at Rs 44.99 to the dollar at the time of writing.
Auto stocks closed weak today and the key losers here were Tata Motors (NYSE:TTM) and Ashok Leyland. As per a leading business daily, Tata group chief Ratan Tata aims to make Tata Motors bring in world-class products in the next decade to meet customers' needs. Although Tata Motors does have the capability to develop products with reliability, finish and technology, Ratan Tata hopes to bring the company's standards on par with those of international companies. However, in the near term, the company is facing challenges. While rising commodity prices have been one factor, the company's endeavor to develop products with better technology has also been hampered by the abnormally high prices of critical components such as automatic transmissions. The company is also finding it economically nonviable to import the crucial components, which are not easily available in India, because of very high customs duty. That said, Mr Tata believes there is considerable synergy to be unlocked between JLR and Tata Motors in engineering and development. It must be noted that JLR reported a strong set of numbers in FY11 which also resulted in an overall improvement in Tata's performance as both sales and operating profits grew at a healthy rate.
Pharma stocks also closed in the red today and the key losers were Dishman Pharma, Biocon and Wockhardt. Pharma major Glenmark received U.S. FDA approval for launching Norgestimate and Ethinyl Estradiol tablets in the highly competitive U.S. generics market. These are oral contraceptive products, and for the 12 months ended March 2011, the total market sales of these drugs stood at U.S. $ 226 m. This is the fourth oral contraceptive product approval for Glenmark. It must be noted that given the competitiveness and price erosion in the U.S. generics market, Glenmark has been focusing on niche product segments which have less competition and thereby more potential for sales and profits. Oral contraceptive is one such therapeutic area that fits the bill. Hence, this approval comes as a positive for Glenmark and will enhance the company's sales from the U.S. going forward. The stock closed weak today.