RBI's rescue attempt in vain

The carnage on the Indian bourses continued as selling pressure was witnessed across the sectors. Stocks from the realty and consumer durables sector were the worst hit. As regards global markets, Asian markets closed deep in the red, while European markets have also opened on a negative note.

The BSE Sensex closed almost 790 points lower, while the NSE Nifty closed lower by 230 points. The BSE Midcap and Smallcap indices also closed in the red, down 8% and 7% respectively. The rupee was trading at 48.65 to the dollar.

Mirroring its global peers, the benchmark indices opened deep in the red on account of worries of the ongoing financial crisis. After the announcement of 1% cut in CRR by RBI to ensure liquidity, the markets pared some losses. However, the tepid growth numbers of IIP worsened the case and the benchmark indices once gain dived down. The overall market breadth was negative with losers outnumbering gainers by a ratio of 10.9 to 1 on the NSE. While Ranabxy (up 4%) and SBI (up 2%) emerged as the top gainers on the BSE Sensex today, Reliance Communications (down 23%) and ICICI Bank (down 20%) led the pack of losers.

As per a leading business daily, Wockhardt has signed a 10 year in-licensing deal with UK-based Sinclair Pharma to market a range of dermatology and dental products in India. The 10-year exclusivity agreement covers a wide range of patented and innovative products, including Papulex (for acne), Atopiclair (for atopic dermatitis), Aloclair (for mouth ulcer) and Decapinol range (for gingivitis and plaque). As per ORG IMS, the Indian dermatology market has been pegged at about Rs 18 bn. As per the agreement, Wockhardt will leverage its technological capabilities by manufacturing formulations in India from bulk imported from Sinclair Pharma. The move is in line with the company's strategy to increase contribution from niche products. The stock (down 6%), along with its peers Dr. Reddy's (down 4%) and Biocon (down 3%), closed in the red. Ranbaxy closed higher by 4%.

ICICI Bank, the second largest bank in the country, closed lower by 18% on the benchmark indices today after having dipped as much as 26% from yesterday’s closing levels during the noon session. This was due to investor worries regarding the bank’s capital position despite the fact that its capital adequacy ratio (CAR) stood at 13.4% in 1QFY09, fairly above the minimum 9% norm as per the RBI. The bank has notified through a press release that it has enough liquidity to meet depositors’ needs and minimal exposure to overseas investments. The mark to market losses on the bank’s investment book in 1HFY09, however, remain a concern. The stock of HDFC Bank closed lower by 5%, while that of SBI ended higher by 2%.