Downtrend continues, Sensex dips 100 pts; Hindalco shines

1:50 pm Buzzing:Biocon shares rallied 5 percent after Delhi Court allowed the company and Mylan to make and sell cancer drug.

Biocon named its cancer drug Canmab, which has been sold by Mylan under the name of Hertraz.

1:45 pm El Nino likely?: According to the Australian Bureau of Meteorology (ABM), the likelihood of an El Nino forming in 2017 has risen. The Southern Oscillation Index (SOI) is currently neutral (-2.2 in Feb), but six (out of eight) models surveyed by ABM suggest that El Nino thresholds may be reached by July 2017. It places the probability of El Niño forming in 2017 at around 50 percent.

This has led to some worries about India’s monsoon season, which runs from June to September, as El Nino conditions are typically associated with below-normal rains, Nomura says.

If conditions develop early in the monsoon season just after sowing is completed (around July as the ABM predicts), then the impact on food production will be adverse, it feels. However, if they develop late (end-August), then the impact may not be as negative, it says.

Overall, Nomura says it does appear that the probability of a below-normal monsoon year in 2017 is higher than the probability of an above-normal year.

1:35 pm FPI investment limit ups: Aditya Birla Group Company Grasim Industries has received approval, in its extraordinary general meeting today, for increasing limit for investment in equity share capital of the company by registered foreign portfolio investors including foreign institutional investors.

1:30 pm GAIL deal: State-run gas company GAIL (India) has signed a time-swap deal with Swiss trader Gunvor to sell some of its US liquefied natural gas (LNG), sources said, as the Indian firm tries to ease the burden of its costly foreign LNG supplies.

It is the first time-swap agreement by GAIL, which is trying to juggle its LNG portfolio to cut costs for price-sensitive Indian customers after a sharp fall in Asian spot prices made its US gas unattractive.

Under the agreement, Gunvor will supply 15 cargoes or about 0.8 million tonnes of LNG to GAIL on India’s west cost between April and December this year in oil-linked prices on a delivered basis in India, two sources with knowledge of the deal said.

1:20 pm Drug launch: Drug firm Alembic Pharmaceuticals said its partner Breckenridge Pharma has launched desvenlafaxine succinate extended release tablets used in treatment of major depressive disorder.

Alembic Pharma had received approval of its ANDA of desvenlafaxine succinate extended release tablets of strengths 50 mg and 100 mg in June 2015.

These are therapeutically equivalent to Pristiq of Pfizer.

“The ANDA was filed as a Paragraph IV on the first-to file date and will share 180 day exclusivity with other ANDA first fillers,” Alembic Pharma said in a regulatory filing.

“The paragraph IV litigation was settled on terms that are confidential,” it added.

Also read – Buy, sell, hold: 7 stocks to focus as market cautious

1:00 pm Market Check

Equity benchmarks extended losses amid consolidation in afternoon trade, with the Sensex falling 100 points, dragged by banking & financials, FMCG, auto and technology stocks. Investors maintained cautious stance ahead of assembly elections results next week.

The 30-share BSE Sensex was down 107.65 points at 28732.14 and the 50-share NSE Nifty declined 35.60 points to 8864.15. About three shares declined for every two shares rising on the BSE.

Bharti Infratel jumped over 5 percent after CLSA has upgraded the stock to buy from outperform with a DCF-derived target price of Rs 356. The brokerage house feels with recent sharp correction in stock, risks related to tenancy impact due to likely Vodafone-Idea merger are overdone now.

Reliance Industries retained its upside, rising 2.66 percent. CLSA has retained its buy call on the stock, with increased target price at Rs 1,500 (from Rs 1,350) after the company guided on Jio’s FY21 EBITDA of over USD 11 billion and expects 50 percent rise in industry revenue to USD 45 billion by FY21.

Hindalco Industries shares gained nearly 4 percent on value buying. FTSE Russell added Hindalco in its largecap index.

Asia markets remained under pressure, following an overnight decline in US equities, as the market priced in increasing chances the Federal Reserve might hike interest rates later this month.

Oil markets rose as the dollar edged away from a multi-week high, but prices are being held in check by unchanged Russian output for February, a sign of its weak compliance on a global deal to cut supplies.