FALL CONTINUES

Domestic barometer gauges after tumbling to their lowest level in last two years in early trade, have now slashed most of their losses thanks to the hefty short covering in the beaten down. Bourses prolonging the previous session's abysmal mood witnessed a carnage in the early deals as investors continued to shun risk amid growing concerns about the health of the US and European economies even after Group of 20 nations pledged to tackle rising risks to the global economy. The G20 statement came as finance ministers and central bankers met in Washington, under pressure from investors to show action in the face of rising stresses in the financial system. On the global front, U.S. stocks ended sharply lower on Thursday, extending a selloff to four days, as a failure of policymakers to arrest global economic stagnation sent markets spiraling downward. Meanwhile, Asian shares too extended their biggest weekly loss since the 2008 financial meltdown. Moreover, the US future indices too were showing a downtick on the screen trade. Back home, breakout of the stocks from TECk and FMCG counters besides Information Technology in green mainly have pruned the losses of the bourses, however, stocks from Metal, Bankex and Capital Goods counters remained the major weak spells in the trade. The 30 share sensitive index on Sensex- declining over 75 points was trading sub 16300 level, while 50 share index- Nifty-recovering from its low was trading lower above 25points, at a sniffing distance of 4900 level. The broader indices too witnessed profit booking at higher level as they were trading lower over 0.25%. The overall market breath on BSE is in the favour of declines which have thrashed advances in the ratio of 1491:718, while 68 shares have remained unchanged.
The BSE Sensex is currently trading at 16,279.49, down by 81.66 points or 0.50%. The index has touched a high and low of 16,295.51 and 16,107.19 respectively. There were just 14 stocks advancing against 16 declines on the index.
The broader indices too were bleeding badly; the BSE Mid cap and Small cap indices were down by 0.76% and 0.99% respectively.
IT up by 0.1.05%, TECk up by 0.85% and FMCG up by 0.24% remained the gainer in the sectoral indices on the BSE. While, Metal down by 1.79%, Bankex down by 1.54%, CG down by 1.45%, CD down by 1.31% and Realty down by 1.16% were the top losers on the index.
The top gainers on the Sensex were Wipro up by 2.22%, TCS up by 1.73%, Tata Power up by 1.59%, Cipla up by 1.17% and Bharti Airtel up by 0.90%.
On the flip side, Tata Motors down by 2.97%, Sterlite Industries down by 2.96%, HDFC Bank down by 2.30%, Tata Steel down by 2.08% and L&T down by 1.69% were the top losers on the index.
Meanwhile, the government's recommendation to cap the foreign direct investment (FDI) in pharmaceutical sector has been criticized by the lobby groups representing foreign investors and industry experts. The ministry of commerce and industry wants new foreign investment in the domestic pharmaceutical companies to be examined by the government on the concern that an increasing number of acquisitions of domestic pharmaceutical companies by overseas companies will increase the cost and hence affect the affordability of poor people for healthcare.
Earlier in this week, the commerce ministry asked Prime Minister Manmohan Singh to intervene in the issue, whereby requesting to bring FDI in pharma sector under the Foreign Investment Promotion Board's examination instead of clearing these under the current 100% automatic route. However, industry experts are of the view that government should use agencies such as Competition Commission of India and National Pharmaceutical Pricing Authority efficiently to make sure the fair use of foreign investment instead of blindly limiting the investment. Restricting the FDI investment into Pharma sector will not be a permanent solution.
The Department of Industrial Policy and Promotion (DIPP) that manages the policy framework allowing or restricting FDI in the country, under the ministry of commerce and industries, in July came out with a discussion paper inviting views on the rationale and relevance of caps on FDI. After this, the DIPP had pushed for some kind of restriction in foreign investment into sector due to increasing accusation in the sector by overseas companies.
The Organization of Pharmaceutical Producers of India (OPPI), which represents foreign drug makers in India, said, 'we strongly believe that this move will be a retrograde step in the financial reforms process of the country and would adversely affect the foreign investment not only in the pharmaceuticals sector in India but possibly far beyond it.'
Tapan Ray, director general of OPPI said, 'Policy decisions should be always based on facts and not on apprehensions.' The OPPI had submitted a letter to ministry in this regard. However, on the other hand, the domestic pharma industry is in fears that continuation of 100% automatic approval policy will be perceived by the overseas investors as the government's endorsement of takeovers by them.
The S&P CNX Nifty is currently trading at 4,896.20, down by 27.45 points or 0.56%. The index has touched a high and low of 4,901.70 and 4,847.15 respectively. There were 23 stocks advancing against 27 declines on the index.
The top gainers of the Nifty were Wipro up by 1.88%, TCS up by 1.65%, HCL Tech up by 1.57%, Reliance Capital up by 1.51% and Tata Power up by 1.32%
On the other hand, Cairn India down by 3.42%, Tata Motors down by 3.37%, Sterlite Industries down by 2.88%, SAIL down by 2.83% and Sesa Goa down by 2.77% were the major losers on the index.

All the Asian counterparts barring Jakarta Composite were trading in the red; Shanghai Composite was down by 2.78%, Hang Seng was down by 1.68%, KLSE Composite was down by 1.11%, Straits Times was down by 1.32%, Seoul Composite was down by 4.25% and Taiwan Weighted was down by 3.06%.

On the flip side, Jakarta Composite was up by 0.76%, remained the lone gainer among the Asian peers.