Dr Reddy's continues to see huge selling, down over 5%.

Shares of Dr Reddy's Lab continued to face selling pressure for a third straight session Tuesday on receiving a warning letter from the US drug regulator over quality issues at its two API manufacturing plants and a formulation unit in Andhra Pradesh and Telangana.

The stock slipped 5.13 percent to Rs 3,324.70 on BSE.

At NSE, shares of the company dropped by 5 percent to Rs 3,323.50.

The stock has fallen by over 20 percent in three days.

Dr Reddy's Laboratories had yesterday said the US Food and Drug Administration has directed it to get a third party assessment of its three manufacturing plants for which it received warning letter last week.

Dr Reddy's CEO G V Prasad also said the company is in the process of shifting some of the products to other plants in the wake of warning letters.

"We have instituted corrective actions to assess the 483 observations received earlier for these sites. The recent letter underscores the need for us to reevaluate the work done in the light of the observations (made by the FDA) and continue to implement the process ...

"The FDA wants us to focus on the issue (on the warning letter) and also get the third party verification and third party evaluation for certain things and also do it across our manufacturing network," Prasad said in conference call.

The country's second largest drug maker last week said it received a warning letter from the US drug regulator relating to two of its Active Pharma Ingredients (API) manufacturing plants and a Formulation plant located in Andhra Pradesh and Telangana.

Markets Remain Under Pressure.

Following a negative trend since the opening of the trading day, the Indian Indices have continued to remain under pressure in the post noon trading session. Sectoral indices are trading on a negative note with stocks from the capital goods, pharma and banking sectors bearing the maximum brunt.

The BSE-Sensex is trading lower by 263 (down 1%) and the NSE-Nifty is trading down by 97 points (down 1.2%). TheS&P BSE Midcap index is trading lower by 1.2% while the BSE Small Cap index is trading down by 0.5%.Gold prices, per 10 grams, are trading at Rs 25,709 levels. Silver price, per kilogram, is trading at Rs 35,130 levels. Crude oil is trading at Rs 2,971 per barrel. The rupee is trading at 66.37 to the US$.

Banking stocks are trading on negative note with Yes Bank and Indusind Bank witnessing maximum selling pressure. As per a leading financial daily, large banks are seeing a surge in big corporate borrowings. Moreover, the bankers are expecting loan demand to shoot further by the end of the financial year in March.

Private sector banks, including HDFC Bank and Axis Bank, posted a 25% YoY growth in large corporate loans in September. SBI recorded a 21% increase while ICICI Bank's corporate lending rose 7% during the period.

This development has made the banking sector appear to be coming out of a single-digit corporate loan growth phase. It may be noted that earlier, top-rated companies raised funds directly from the market through commercial papers or corporate bonds. However, it appears that now the demand for bank loans is largely driven by a pick-up in infrastructure sector.

Lastly, bankers were also of the opinion that refinancing of loans will happen over a period of time and that will also help expand the loan growth.

Union Bank of India has reported its results for the second quarter ended September 30, 2015.

The bank has reported a 77% surge in its net profit to Rs 6,581 million during the quarter on a YoY basis. However, this was largely because the bank chose to make lower provisions against bad loans even as stressed assets rose.

Net interest income (NII) rose marginally by 0.8% YoY to Rs 21 billion during the period. Other income increased by 16% YoY at Rs 565 million.

Gross non-performing assets (NPAs) for the quarter jumped to 6% as compared to 4.7% in the quarter ended June 30, 2015. Provisions and contingencies for the quarter fell 45% from a year ago to Rs 4,325 million. Post provisioning, net NPAs were at 3% versus 2% in the June quarter.

Presently, the stock of Union Bank of India is trading down by 1.6%.