Pharma Stocks Outlook for the week (11-15.06.2012)

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Jun 9, 2012, 6:54:58 AM6/9/12
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RUPEE DESK- Pharma Stocks Outlook for the week (11-15.06.2012)

 

Pharmaceutical stocks are likely to trade in a narrow range next week as currently the sector lags major trigger to drive any movement. Pharmaceutical stocks are seen taking cues from the movement of the benchmark indices--National Stock Exchange's 50-stock Nifty and BSE Ltd's 30-share Sensex. We expect the broad market to see some upside next week anticipating that the Reserve Bank of India would cut its repo rate by 25 basis points in its monetary policy on Jun 18. The repo rate is the interest rate at which the central bank lends to other banks under its Liquidity Adjustment Facility.


The market currently lacks direction due to policy logjam, foreign investors losing faith in Indian market, and weak economic growth rate. India's gross domestic product grew at 6.5% in 2011-12 (Apr-Mar), the slowest pace in nine years. However, Ranbaxy Laboratories is likely to see some upside next week as the company launched  Ropinirole Hydrochloride XR tablets, a bioequivalent generic version of requip xl tablets in the US market this week.


Market is also looking forward for some clearance in the foreign direct investment policy in the sector. Currently, there is an overlap between Competition Commission of India and Foreign Investment Promotion Board on clearance for brownfield FDI proposals in the sector. The Foreign Investment Promotion Board has cleared nearly 25 FDI proposals worth 30 bln rupees.
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