Mkts deep in red, Sensex sheds 338 pts

Font Size

Print

Feedback

Email

Discuss

Related Articles

Maytas Infra shares fall by max open limitMarkets turn positive, Satyam dragsStock markets closed for MoharumMetal stocks surge 4 per cent

Mumbai, June 19:: Indian shares fell 2.2 per cent on Thursday to their lowest close in a week, spooked by inflation worries and high oil prices, while drugmaker Ranbaxy tumbled after a patent settlement with Pfizer was seen as delaying launch of a generic drug.

Traders are bracing for a spike in annual inflation to 13-year highs when the data is released on Friday, reflecting an increase in state-set fuel prices in early June.

A Reuters poll of 12 analysts forecast the wholesale price index to have risen to 9.82 percent in the 12 months to June 7, which would be the highest since June 3, 1995, when annual inflation was at 9.89 percent.

"The real culprit is high oil prices," said D.D. Sharma, vice-president at local brokerage Anand Rathi Securities.

"Unless oil prices come down, there is no question that inflation will be lower, and this (inflation) is putting a lot of pressure on margins of corporates."

Oil prices remained above $135 a barrel on Thursday and have climbed 40 precent this year. India imports 70 percent of its oil.

Ranbaxy Laboratories, India's No.1 drugmaker by sales, fell as much as 8.4 percent during trade after the settlement with Pfizer on a patent dispute was seen as delaying the launch of a generic version of cholestrol drug Lipitor.

"We had so far assumed a US Lipitor launch in March 2010, with an outside chance of a delay until June 11," Credit Suisse analysts led by Neelkanth Mishra said in a research note.

The settlement allows Ranbaxy to launch a generic version of Lipitor from Nov. 30, 2011.

The stock ended down 7.7 percent at 552.25 rupees, its lowest close since June 12.

Brokerages said the settlement also lowered the chances of the US drugmaker making a counter bid for Ranbaxy, which has agreed to a friendly takeover by Japan's Daiichi Sankyo in a deal worth up to $4.6 billion.

The benchmark 30-share BSE index closed down 2.17 percent, or 334.32 points, at 15,087.99, its lowest since June 10, with 27 components in the red.

In the broader market, 1,804 losers led 839 gainers on volume of more than 236 million shares. The main BSE index is down by more than a quarter so far this year.

Investors are shying away from Indian equity funds as a sustained slump in the stock market wipes out a major chunk of their stunning gains in 2007, but the industry is not yet facing pressure from redemptions.