Negative market breadth

Key benchmark indices hovered close to their intraday low in negative terrain in mid-morning trade. At 11:22 IST, the barometer index, the S&P BSE Sensex, was off 199.12 points or 0.77% at 25,687.50. The fall in 50-unit CNX Nifty 50 index was higher in percentage terms than Sensex's fall. The Nifty 50 index was off 69.55 points or 0.88% at 7,794.60. Key indices fell today, 4 December 2015, in line with drop in global stocks after the European Central Bank (ECB)'s stimulus package announced after policy meet yesterday, 3 December 2015, fell well short of markets' high expectations.

The Nifty hit fresh intraday low in mid-morning trade. The Nifty hit over two-week low when it dropped 79.35 points or 1% at the day's low of 7,784.80 in mid-morning trade. Earlier, the Sensex hit its lowest level in more than two weeks when it lost 242.27 points or 0.93% at the day's low of 25,644.35 in early trade.

The market breadth indicating the overall health of the market was negative. On BSE, 1,260 shares fell and 1,006 shares rose. A total of 145 shares were unchanged. The BSE Mid-Cap index was currently off 0.55%. The BSE Small-Cap index was currently off 0.23%. The decline in both these indices was lower in percentage terms than the Sensex's fall.

In overseas markets, Asian stocks declined as the European Central Bank (ECB)'s stimulus package fell well short of markets' high expectations. US stocks dropped yesterday, 3 December 2015 as the ECB disappointed market hopes for greater stimulus. The ECB cut its deposit rate deeper into negative territory and extended its asset buys by six months, as expected. But some market participants had hoped for greater stimulus.

The ECB President Mario Draghi after a policy meet yesterday, 3 December 2015, announced the central bank would extend its massive 60 billion euro ($63.5 billion) a month bond-buying scheme to at least March 2017. The ECB cut its deposit rate further into negative territory by 10 basis points to a fresh low of -0.3%, down from -0.2%.

Most pharma stocks gained on weak rupee. Cipla (up 0.36%), Lupin (up 0.5%), Wockhardt (up 0.93%), Divi's Laboratories (up 0.43%), and Glenmark Pharmaceuticals (up 0.54%) gained. Dr Reddy's Laboratories (down 0.67%), Aurobindo Pharma (down 0.79%), and Cadila Healthcare (down 0.74%) declined. Weakness in rupee could boost sales of pharma companies in rupee terms as pharma firms derive substantial revenue from exports.

Sun Pharmaceutical Industries rose 3.91% after the company said during market hours that one of its subsidiaries has received final approval from United States Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) for generic version of Gleevec, Imatinib Mesylate tablets 100mg and 400mg. Imatinib Mesylate tablets, 100 mg and 400 mg are therapeutic equivalents of Novartis' Gleevec tablets.

As per IMS MAT August 2015, these tablets have annual sales of approximately $2.5 billion in the US. These tablets are indicated for the treatment of chronic myeloid leukemia. The Sun Pharma subsidiary, being the first-to-file an ANDA for generic Gleevec\ with a para IV certification, is eligible for 180-days marketing exclusivity in the US. Under the terms of a settlement agreement with Novartis, the Sun Pharma subsidiary is permitted to launch its version of generic Gleevec in the United States on 1 February 2016. The commercial launch of this product is scheduled for 1 February 2016.

FMCG stocks were mixed. Tata Global Beverages (up 0.07%), Britannia Industries (up 0.09%), Jyothy Laboratories (up 0.48%), Procter & Gamble Hygiene and Health Care (up 0.77%), and Colgate Palmolive India (up 0.6%) gained. Nestle India (down 0.18%), Marico (down 0.5%), Hindustan Unilever (HUL) (down 1%), GlaxoSmithkline Consumer Healthcare (down 1.05%), Godrej Consumer Products (down 0.79%), and Bajaj Corp (down 0.27%) declined.

Dabur India dropped 3%. The company said that it has lost some part of juice sale in October and November 2015 and estimated juice sale during Q3 December 2015 will be lower by 10-15% from previous year as there is no improvement in the eco-political situation in Nepal till date as was informed earlier on 19 October 2015 and the India-Nepal border continues to remain closed. The company made announcement after market hours yesterday, 3 December 2015. This is a onetime issue beyond the company's control and will have a near term impact on Q3 December 2015 performance. However the company should be able to get back on track in Q4 March 2016, Dabur India said.

The company has already ramped up the production of juices in Sri Lanka and Newai, Rajasthan and has also engaged with third parties to cater to demand requirement for the month of December and going forward, Dabur India said. Depending upon the timing of opening of the border, the impact on inventory and other cost will be evaluated/ considered, the company said.

Dena Bank rose 2.3% after its board of directors approved raising funds from the equity market by diluting the government's stake to 52% from the current 65%. The announcement was made after market hours yesterday, 3 December 2015. As on 30 September 2015, the Government of India held 65% stake in Dena Bank. Besides the stake dilution, the bank also plans to raise capital through additional tier-I (AT1) bonds of up to Rs 1500 crore in one or more tranches. It will also raise capital through tier-II bonds up to Rs 1000 crore, the lender said.

Tree House Education & Accessories was locked at 10% upper circuit at Rs 22.60. Zee Learn surged 6.35%. Tree House Education & Accessories' and Zee Learn's board of directors at their respective board meetings held today, 4 December 2015, accorded in-principle approval for exploring consolidation options between the two companies.. The two companies separately made the announcement during market hours today, 4 December 2015.

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