After opening the day in green, share markets in India have continued the momentum and are presently trading above the dotted line. Sectoral indices are trading mixed with stocks in the and stocks in the PSU sector trading in green. While stocks in the IT sector are trading in red.

The BSE Sensex is up by 95 points (up 0.3%) and the NSE Nifty is trading up by 38 points (up 0.4%). Meanwhile, the BSE Mid Cap index is trading up by 1.1%, while the BSE Small Cap index is trading up by 1.4%. The rupee is trading at 64.96 to the US$.

In news from stocks in the aviation sector. Interglobe Aviation, which operates the Indigo Airlines brand was under pressure and slumped over 2.2% in early trade today.

The company's shares witnessed selling pressure after the aviation regulator, Directorate General of Civil Aviation (DGCA) ordered the grounding of 8 Indigo and 3 GoAir planes.

DGCA ordered the companies to ground A320 Neo aircraft fitted with Pratt & Whitney engines, citing safety concerns.

The DGCA order follows reports of three separate incidents involving mid-air engine shutdowns for the same type of aircraft.

IndiGo controls 39.6% share of the domestic market, with 153 planes and over 1,000 daily flights to 49 cities.

Indian Aviation Spreading its Wings

Air travel has recorded double-digit growth for 40 consecutive months, thanks to low fares, the addition of new flights/destinations, and overall growth in the economy.

What's foreseeable for India's aviation traffic in 2018 is some pressure on the back of the consistent rise in crude oil prices. Earlier this month, Brent crude oil briefly breached US$70 per barrel and touched its highest level since December 2014. Crude prices have been driven up by production curbs in OPEC nations and Russia, as well as by robust demand on the back of healthy global economic growth.

Oil prices are closely monitored by the Indian air carriers, as aviation turbine fuel is their single largest input cost. A sharp rise in the cost of fuel puts pressure on margins, and consequently an increase in air fares.

Although air travel is becoming the new normal, investors need to understand the industry dynamics before buying up aviation stocks.

In news from stocks in the pharma sector, Cadila Healthcare share price surged after it was reported that the company's received a final approval from the United States Food & Drug Administration (USFDA) to market Tizanidine tablets USP.

The drug is used to treat muscle spasms caused by certain conditions such as multiple sclerosis, spinal cord injury and works by helping to relax the muscles. It will be manufactured at the group's formulations manufacturing facility at SEZ, Ahmedabad.

The group now has more than 180 approvals and has so far filed over 310 ANDAs since the commencement of the filing process in FY04.

Indian pharma companies catering to the US markets are breathing a sigh of relief. After being adversely affected by import bans and the suspension of new drug approvals from manufacturing facilities in the past three years, there has been a sharp pick-up in new drug approvals in FY17.

However, note that USFDA alerts on Indian pharma companies have increased over the past few years. Regulators used to visit the plants every two years. Now they come every eight months. Increasing inspections have led to a total of 41 import alerts in the past eight years - 33 of them (80%) in just the last four years (2013-16). This clearly signifies increased USFDA scrutiny on Indian pharma firms. If that wasn't enough, increasing pricing pressure in the generics segment has dented realizations.

However, the recent development of USFDA expediting the drug approval process can bring some respite for Indian pharma companies. This comes as drug approvals for Indian companies have gone up 50% in the period from January to June 2017 compared to the same period last year.

While short-term pain is expected, companies with strong R&D capabilities and compliant plants will do well over the long term. The uncertainties make it important to be stock specific in the sector. It is important to look for companies that have the competence and staying power to overcome the challenges.