Stocks in India closed on a sour note on Friday after government data showed that inflation jumped to a seven-year high due to runaway energy prices and soaring food prices. Annual inflation, which is measured by India's Wholesale Price Index, rose 8.75% for the week ending on May 31, vs. 8.24% in the previous week. Analysts in the Far East now fear that another rate hike is in the cards when the Indian Central Bank meets next month.
"We expect the Reserve Bank to raise the repurchase rate by a further 25 basis points in the next policy meeting,'' said Tushar Poddar, an economist at Goldman Sachs Group in Mumbai. "We also expect a further 50 basis points increase in the cash reserve ratio in the remaining of 2008."
The Bombay Stock Exchange's Sensex Index lost 60.58 points, or 0.40%, to 15,189.62. Here's a look at how some India-based American depositary shares traded in the U.S. on Friday.
India's second-largest pharmaceutical manufacturer, Dr. Reddy's (RDY - Get Report), announced the launch of the Dr. Reddy's Laboratories Generics Company Intelligence Report. The new reports will help investors understand the complex issues surrounding Dr. Reddy's in the generic drug market. Some of the topics covered in the reports will be quarterly and annual financial results, information on the company's products and drug approvals, M&A activity, strategic alliances and litigation. American depositary shares of Dr. Reddy's, which trade on the NYSE, rose 1.2% to $16.68.Elsewhere in the Indian drug sector, U.S.-based pharmaceutical giant Pfizer (PFE) is rumored to be considering a hostile takeover offer for Ranbaxy Laboratories, India's largest drug maker, according to the Business Standard newspaper. Pfizer is reportedly considering an offer to buy 65% of Ranbaxy stock that isn't held by the Singh family, which would counter Japanese drugmaker Daiichi Sankyo's agreed takeover price of $4.6 billion for a 50.1% stake. Shares of Pfizer moved up 1.4% to $17.99, and shares of Ranbaxy jumped 4.3% in India.