Sensex Falls After RBI Dashes Hopes Of Repo Rate Cut, Sun Pharma Tanks 6%

Indian share markets fell considerably in the final hour of trade after Reserve Bank of India unexpectedly kept it’s repo rate unchanged at 6.25%. At the closing bell, the BSE Sensex stood lower by 156 points, while the NSE Nifty finished down by 41 points. Meanwhile, the S&P BSE Mid Cap & the S&P BSE Small Cap finished down by 0.2% and 0.5% respectively. Losses were largely seen in pharma, realty and banking stocks.

Asian markets finished higher today with shares in Japan leading the region. The Nikkei 225 is up 0.74% while China’s Shanghai Composite is up 0.71% and Hong Kong’s Hang Seng is up 0.55%. European markets are also trading higher with shares in Germany leading the region. The DAX is up 1.48% while London’s FTSE 100 is up 1.30% and France’s CAC 40 is up 1.13%.

The rupee was trading at 67.87 against the US$ in the afternoon session. Oil prices were trading at US$ 51.06 at the time of writing.

Shares of Sun Pharma extended their losing streak for fourth consecutive session and plunged 6% in today’s trade after the company confirmed that its Halol facility had undergone an inspection by United States Food and Drug Administration (USFDA) recently. Reportedly, USFDA has informed Sun Pharma that the Halol facility has issued a 14-page Form 483 post inspection.

Concerns over Halol resurfaced after Sun’s plant at Mohali received seven observations after a re-inspection by the USFDA (Subscription Required) last month. Significantly, it is the same team of FDA executives that re-inspected the Halol plant, too. It is to be noted that Sun Pharma’s plant at Mohali is one of the facilities of former Ranbaxy.

As per the reports, USFDA clearance to Halol unit is key to its revenue growth, especially for US business that contributed nearly 50% to overall revenue in FY16.

Sun Pharma’s Halol plant received a warning letter last year from the regulator due to past violations which has prevented new product launches from the facility in the US, Sun’s largest market. That has slowed revenue growth at the company and imposed new costs to make the plant USFDA compliant. The latest USFDA inspection came after the company invited the agency back to review a year’s worth of remediation efforts in the hope that the warning letter would be lifted.