Business Daily from THE HINDU group of publications
Wednesday, Oct 10, 2007
ePaper
Business Daily from THE HINDU group of publications Wednesday, Oct 10, 2007 ePaper |
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Markets
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Stock Markets Industry & Economy - Pharmaceuticals
Our Bureau Mumbai, Oct. 9 While the benchmark index today surged 4.51 per cent to close at an all-time high of 18280.24, the BSE mid-cap and small-cap indices rose 2 per cent and 2.59 per cent respectively only. The BSE HC and IT rose a mere 1.71 per cent and 2.51 per cent respectively, whereas the rally was led by oil and gas and realty indices as they registered a rise of 6.51 per cent and 5.03 peer cent respectively. Analysts believe that the continuous rupee appreciation has taken its toll on the healthcare sector. “The healthcare industry has come under a lot of price pressure especially from the US and Europe. Their expenditure has gone up and the performance has not been very good, both in the top and bottomline. It is only because of acquisitions that some of them are doing well. What’s pulling down the sector is the export valuations,” said a healthcare analyst from a city-based broking firm. The mid-cap and small-cap stocks have not really rallied, as the recent rally has more or less been triggered by FII money, said analysts. “FIIs find large caps more attractive as they are more liquid, whereas small and midcaps do not seem that much of an attraction. Thus there is more activity in large caps,” said Mr Rajesh Saluja, Chief Executive Officer, ASK Wealth Advisors. Rupee impact“The appreciation of the rupee is hurting the exports for the HC sector. It’s a sort of mixed bag situation here as the dominating companies are managing to do reasonably well, whereas the small and mid cap firms have been affected in a bad way, ” said Mr Harendra Kumar, Head of Research, ICICI. “The IT sector did not do well mainly because of the dollar’s position against the rupee as well as the sub-prime position in the US.” “There could be two reasons why the IT sector is not doing well. One, because of the rupee appreciation. Two, because their manpower needs have gone up, but the supply does not meet the demand. But then, I think this is a short-lived problem, as our dependency on the US is getting less and less,” said an IT sector analyst who did not want to be quoted. “As for what I think about the future of the IT sector, the boom started with IT, and the growth base of the market will only get wider. So we will soon see the IT sector back in the top performing indices” “Everybody is jumping on the bandwagon of momentum stocks, people want to make quick money so they eye stocks like Reliance and other such frontline stocks and do not really go in for mid-cap and small-cap stocks,” said Mr Navjeet Singh Sobti, Executive Vice-Chairman, Almondz Global Securites Ltd. More Stories on : Stock Markets | Pharmaceuticals | Forex
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