Pharma shares gain, IT stocks drop

Stocks trimmed some gains in mid-morning trade after an intraday rally triggered by decline in crude oil prices. At 11:23 IST, the barometer index, the S&P BSE Sensex, was up 185.49 points or 0.53% at 35,110.36. The Nifty 50 index was up 63.55 points or 0.6% at 10,668.70. Pharma shares gained. IT stocks dropped.

In commodities, oil prices fell today, 28 May 2018 extending a steep decline in the previous session, as the market eyed an increase in output from the world's three top crude producers, Russia, the United States and Saudi Arabia. The slide in global crude oil prices will help India in containing inflation, current account and fiscal deficits. India imports about 80% of its crude oil requirement.

Trading for the week began on an upbeat note as domestic stocks saw gap-up opening as crude oil extended a steep decline in the previous session. The Sensex regained the psychological 35,000 level in opening trade. Key benchmark indices extended early gains and hit fresh intraday high in morning trade.

The S&P BSE Mid-Cap index was up 1.09%. The S&P BSE Small-Cap index was up 1.28%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 1,638 shares rose and 643 shares fell. A total of 124 shares were unchanged.

Pharma shares gained. Cipla (up 1.33%), Dr Reddy's Laboratories (up 1.11%), Glenmark Pharmaceuticals (up 0.48%), Lupin (up 2.78%), Alkem Laboratories (up 1.59%), GlaxoSmithKline Pharmaceuticals (up 0.41%), Aurobindo Pharma (up 2.36%) and Wockhardt (up 2.26%) gained. Cadila Healthcare (down 4.3%) fell.

Sun Pharmaceuticals Industries jumped 7.39%. On a consolidated basis, net profit after minority interest of Sun Pharmaceuticals Industries rose 10.35% to Rs 1528.99 crore on 1.67% decline in net sales to Rs 6711.01 crore in Q4 March 2018 over Q4 March 2017. The result was announced after market hours on Friday, 25 May 2018.

The decline in Q4 net sales was primarily driven by the US and the Active Pharmaceutical Ingredients (API) businesses. All other businesses recorded positive growth for the quarter. For Q4 March 2018, external sales of API were at Rs 332 crore, a decline of 16% over Q4 last year.

India sales were reported at Rs 1963 crores, growth of 2% over Q4 last year. US finished dosage sales were reported at $368 million, down by 3% over Q4 last year. Emerging markets sales were reported at $199 million, up by 10% over Q4 last year. Rest of World sales were reported at $116 million, a growth of 6% over Q4 last year. Research and development (R&D) investments were reported at Rs 743 crores (11% of sales) compared to Rs 600 crores (9% of sales) for Q4 March 2017.

Other operating income for the quarter was reported at Rs 266 crore, which includes $20 million of milestone payment from Almirall S.A (Spain) as part of the licensing agreement for the development and commercialization of Tildrakizumab for psoriasis in Europe.

Dilip Shanghvi, managing director of the company said that the company's Q4 performance is in-line with its guidance. Over the last four quarters, the company has been able to record a gradual improvement in performance despite a challenging US generic pricing environment. FY 2019 will mark the crossing of some important milestones in the company's specialty journey with the likely launch of 3 specialty products in the US - Ilumya, OTX-101 and Yonsa - which will entail upfront investments. The company is also planning to conduct additional clinical trials for a new indication of Ilumya. The company will continue to evaluate opportunities in the specialty segment to further enhance this business.

IT stocks dropped. TCS (down 2.32%), Infosys (down 1.09%), Wipro (down 0.49%), HCL Technologies (down 2.28%), Oracle Financial Services Software (down 1.02%), MindTree (down 0.58%), Hexaware Technologies (down 2.35%) and Mphasis (down 4.23%) declined.

Tech Mahindra dropped 4.16%. On a consolidated basis, net profit of Tech Mahindra rose 33.15% to Rs 1230.80 crore on 3.58% rise in net sales to Rs 8054.50 crore in Q4 March 2018 over Q3 December 2017. The result was announced after market hours on Friday, 25 May 2018.

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) rose 11.7% to Rs 1412 crore in Q4 March 2018 over Q3 December 2017. The software services exporter saw a rise of 8.3% in the number of active clients, and strong growth in deal wins in the $5 million and $10 million client categories.

Overseas, most Asian stocks were trading higher on signs that the United States and North Korea are still working towards holding a summit next month. Profits earned by Chinese industrial firms in April reportedly rose at their fastest pace in six months, data from the National Bureau of Statistics (NBS) showed on Sunday, 27 May 2018 as factories benefited from higher prices and strong demand.

US stocks ended mostly lower Friday, 25 May 2018 on lighter than normal volume as a plunge in crude-oil futures, sparked by reports that OPEC and major oil-producer Russia were considering increasing output, slammed shares of energy-related companies.

US President Donald Trump reportedly said on Sunday, 27 May 2018 that a US team had arrived in North Korea to prepare for a proposed summit between him and North Korean leader Kim Jong Un on 12 June 2018 in Singapore, which Trump pulled out of last week before reconsidering.

Meanwhile, US markets will remain closed today, 28 May 2018 for Memorial Day. UK markets will remain closed today, 28 May 2018 for the spring bank holiday.

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