Sensex falls 156 pts amid US poll worries, drug firms hit

The Sensex fell further after the reports of criminal investigation of generic makers over suspected price collusion and closed  156 points lower.

By BT Online  
Friday, November 4, 2016

The market fell for a fourth consecutive session and closed at four month lows led by drug makers, after Bloomberg reported that US prosecutors could file charges by year-end in a criminal investigation of generic makers over suspected price collusion.

Indian drug makers, most of which count the United States as their biggest export market, were the top losers on the key indexes on Friday.

The Sensex fell further after the reports of criminal investigation of generic makers over suspected price collusion and closed  156 points lower.

The NSE Nifty too fell 51.20 points or 0.60 per cent to 8433.75 level.

While Sun Pharma stock fell 7.41 per cent or 52.25 points,  Dr Reddy's Laboratories fell 5.67 per cent or 184 points on the BSE.

On Friday, a Sun Pharma spokesman said the company continues to cooperate with the DoJ, and has no other details to offer at the moment. A spokesman for Dr Reddy's declined comment.

The falls in shares of the drug makers shares offset gains in consumer goods companies on hopes the government would apply lower tax rates for the sector after announcing on Thursday the four main rate bands for a new Goods and Services Tax (GST).

Though those are steeper than the rates proposed earlier analysts said the consumer goods sector would likely see the lower rates applied.

The ITC stock too rose 4.51 per cent  to Rs 251.20 on BSE.  While HUL erased gains and closed 0.91 per cent higher, ITC rose 3.64 per cent to Rs 249.10 on the BSE. Colgate Palmolive closed 3.40 per cent higher at Rs 983.85 on the BSE. 

The BSE fast moving consumer goods index rose 1.41 per cent in aniticipation of positive effects of the GST tax rates on its constituents.

Sensex heavyweights Infosys and Reliance Industries rose 0.40 percent and fell 1.92 per cent, respectively.

Reports came that government has sought $1.55 billion from Reliance Industries and its partners for drawing natural gas belonging to state-owned ONGC in the KG basin over the last seven years.

Market breadth was negative with 2,224 stocks falling against 681 advancing on the BSE.

Sentiment was also hit by continued uncertainty about the U.S. election on Tuesday, which polls show could be nail-bitingly close.

"There will just be stock specific action today," said Jayant Manglik, President of Retail Distribution at Religare Securities.

"If there is any change in lead position in U.S., then there will be some action."

(With Reuters inputs)

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