September 16, 2013 / 11:22 AM / 4 years ago

India's NSE index falls; Ranbaxy plummets after third FDA ban

5 Min Read

* NSE ends 0.17 pct lower; BSE index ends flat
    * Ranbaxy hit with third FDA ban, shares mark record one-day
fall
    * HSBC downgrades Indian shares to "underweight", citing
risks to growth
    * High onion prices send India's inflation to six-month high

    By Abhishek Vishnoi
    MUMBAI, Sept 16 (Reuters) - India's NSE index declined for a
third day on Monday, dragged by Ranbaxy Laboratories Ltd shares
which recorded their biggest intra-day fall after an import
alert ban from the U.S. drug regulator, while
faster-than-expected rise in August inflation also weighed. 
    India's headline inflation shot to a six-month high in
August, driven by a 245 percent annual jump in onion prices,
hardening the case for new central bank Governor Raghuram Rajan
to keep interest rates high at his first policy meeting later
this week. 
    Monday's data is a grim reminder of the economic pressures
facing Rajan as he steps in to deal with India's worst economic
crisis in more than 20 years. 
    Also on watch is the U.S. Federal Reserve meeting on Sept.
17-18 when it might decide to taper its bond-purchase programme.
 
    HSBC downgraded Indian shares to "underweight" from
"neutral", citing the recent rally and downside risks to growth.
 
    "Markets are looking risky in the sense that the Fed may go
ahead with tapering, while policy announcements from RBI cannot
happen everyday," said Aneesh Srivastava, chief investment
officer of IDBI Federal Life Insurance.
    Dollar deposits garnered by banks from Indian investors
overseas would be watched closely in the near term, Srivastava
added.
    The broader NSE index fell 0.17 percent, or 10.05
points, to end at 5,840.55, marking its third consecutive day of
fall.
    The benchmark BSE index ended 0.05 percent, or 9.71
points higher, at 19,742.47.
    Shares in Ranbaxy, India's biggest drugmaker by sales, fell
30.34 percent to mark their lowest close in a month on Monday
after a third plant in India was sanctioned with an import alert
ban from the U.S. Food and Drug Administration. The ruling also
triggered brokerage downgrades. 
    The company said in an exchange filing it had not received
any communication from the FDA on an import ban on its Mohali
factory in northern India. 
    Strides Arcolab Ltd, another Indian drugmaker,
fell nearly 4 percent after it said a plant of its unit Agila
Specialties Private Ltd had received a warning letter from the
FDA after its inspection by the regulator in June. 
    Technology shares also fell on Monday as the rupee rose over
1 percent to the dollar after news that Lawrence Summers had
dropped out of the race to head the Fed, suggesting a more
gradual approach to tightening monetary policy. 
    Tata Consultancy Services Ltd fell 2.6 percent,
Infosys Ltd lost 1.1 percent, while HCL Technologies
Ltd ended 4.7 percent lower.
    Among the gainers, private sector banks rose on value
buying. ICICI Bank Ltd rose 3 percent, while HDFC Bank
Ltd gained 2.2 percent. 
   
    For additional stocks on the move double click       
     
   FACTORS TO WATCH                                             
* Dollar suffers after Summers pulls out of Fed race      
* Oil falls below $109 as Syria deal eases supply concerns 
* Stocks rally, dollar dips as Summers quits Fed race 
* Foreign institutional investor flows          
* For closing rates of Indian ADRs                       
                       
   ASIA-PACIFIC STOCK MARKETS:                                  
Pan-Asia........ Japan.......   S.Korea... 
S.E. Asia.......        Hong Kong...  Taiwan.... 
Australia/NZ....        India.......  China..... 
                        
   OTHER MARKETS:                                               
Wall Street ....         Gold ....... Currency.. 
Eurostocks.....         Oil ........  JP bonds... 
ADR Report .....       LME metals. US bonds.. 
Stocks News US.. Stocks News Europe     
                       
   DIARIES & DATA:                                              
Indian Data Watch   Asia earnings diary 
U.S. earnings diary     European diary       
Indian diary          Wall Street Week Ahead  
Eurostocks Week Ahead                                   
                         
   TOP NEWS:                                                    
   For top Asian company news, double click on:       
   U.S. company news  European company news  
   Forex news        Global Economy news  
   Technology news  Telecoms news        
   Media news       Banking news           
   Politics/General    Asia Macro data      <ECONASIA 

 (Editing by Prateek Chatterjee)

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