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Drugmaker Ranbaxy Laboratories tumbled 18 per cent, the biggest fall among index components, after US regulators said it falsified data, putting a question mark over prospects in the key US market. The 30-share BSE index .BSESN firmed 0.59 per cent, or 52.30 points, to 8,954.86, its highest close in a week. The benchmark fell 1.3 per cent at one stage, led down by banks, before bouncing back. "I don't see any direction coming unless positive cues come from global markets," said Deven Choksey, managing director at K R Choksey Shares & Securities. European markets snapped a four-day losing streak and rose early, helped by financial stocks after Royal Bank of Scotland posted a lower-than-expected loss for 2008 and Britain launched a scheme to insure toxic bank assets.
However, banks in India fell as investors fretted over high government borrowings that could cap their treasury gains that had been helping profits in the slowing economy. Largest lender State Bank of India fell 1.3 per cent to 1,024.15 rupees, ICICI Bank shed 4.6 per cent to 324.75 rupees and mortgage lender Housing Development Finance Corp lost 3.4 per cent to 1,211.65 rupees. Expectations for a cut in lending rates remain, but traders said this could put pressure on profit margins for banks in the near term because their main source of funds are term deposits tied to higher costs. "Everybody is expecting rate cuts, but the market doesn't know when," said D.D. Sharma, vice president at Anand Rathi Securities. Annual inflation rate slowed to 3.36 per cent in mid-February, the lowest in almost 15 months. Reliance Industries, which has the heaviest weight in the BSE index, rose 1.9 per cent to 1,290.45 rupees as world oil prices climbed to $43 a barrel, while export-focused Infosys firmed 1.65 per cent to 1,236.35 on the back of rupee's fall. State-run explorer Oil and Natural Gas Corp rose 2.7 per cent to 715.25 rupees on plans to sell a 19 per cent holding in a planned petrochemical plant in western India to gas firm GAIL. Twenty-one of the BSE index components ended higher, while in the broader market declines led advances in the ratio of 1.3:1 on low volume of 196 million shares. Ranbaxy fell 18 per cent to 169.95 rupees after US regulators said on Wednesday one of its plants in India had falsified data and test results submitted in approved and pending drug applications. In Tokyo, shares of its parent Daiichi Sankyo fell 9.5 per cent. The 50-share NSE index .NSEI rose 0.84 per cent to 2,785.65 points.
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