Indian Indices Chart Turnaround; Pharma Stocks Top Gainers

After opening the day in green, share markets in India witnessed positive trading activity throughout the day and ended the day in green. Sectoral indices too ended the day in green, with stocks in the pharma sector and stocks in the FMCG sector leading the gains.

At the closing bell, the BSE Sensex stood higher by 225 points (up 0.6%) and the NSE Nifty closed up by 60 points (up 0.5%). The BSE Mid Cap index ended the day up 0.3%, while the BSE Small Cap index ended the day up by 0.5%.

Asian stock markets finished in red. As of the most recent closing prices, the Hang Seng was down by 1% and the Shanghai Composite was down by 0.5%. The Nikkei 225 was down by 0.6%. Meanwhile, European markets were trading on a mixed note. The FTSE 100 was down by 0.2%, The DAX, was up by 0.1% while the CAC 40 was up by 0.2%.

The rupee was trading at Rs 71.87 against the US$ in the afternoon session after breaching the Rs 72 per dollar mark. Oil prices were trading at US$ 77.6 at the time of writing.

In news from the global economy. According to a leading financial daily, US President Donald Trump could impose US$ 200 billion worth of tariffs on China as early as this week. Notably, the public comment period ends next week, wherein companies and members of the public have until 6 September to submit comments on the proposed duties, which cover everything from selfie sticks to semiconductors.

If he goes ahead with the proposed tariffs, it would mean thousands of products from fish to chemicals, metals and tires would face new taxes. The president plans to impose the tariffs once that deadline passes. Broadening the tariff battle would mark the most significant move yet in a months-long trade standoff and could add to the trade war tensions.

Note that in March 2018, Trump said, 'Last year we lost US$ 500 billion on trade with China.'

But this isn't true.

Donald Trump Is Wrong About the Trade Deficit Data

According to the US Census Bureau, the actual trade deficit is US$ 375 billion.

Also, running a trade deficit isn't a bad thing.

If trade surplus was a measure of success, then why hasn't countries like Nigeria, Malta, and Azerbaijan faring well? These countries enjoyed trade surpluses last year.

Or take the example of Japan, which is enjoying a trade surplus for many years, but it failed to lift its economy from a low growth phase.

The Trump view is basically that exports are good. They are like revenues. Imports are bad. They are like costs.

However, this approach doesn't consider that both imports and exports are beneficial.

So, by buying goods and services more cheaply than it costs to produce them at home, the nation benefits from imports.

Similarly, by selling goods and services in world markets, it can enjoy higher prices for them than it could earn by selling only at home.

That's the point of any trade.

Nevertheless, at the current juncture, trade wars have created some fear in the market.

But this could be an opportunity to lap up good stocks.

Moving on to news from stocks in the oil and gas sector. ONGC share price was in focus today after the company reported oil and gas discoveries.

ONGC said that it has made oil and gas discoveries in Madhya Pradesh and West Bengal that may potentially open up two new sedimentary basins in the country.

ONGC had previously opened six out of India's seven producing basins for commercial production. It is in the process of adding the eighth by putting Kutch offshore on the oil and gas map of India.

ONGC has drilled four wells after the discovery and will now hydro-frack it by the end of the year to test commerciality of the finds.

Similarly, an oil and gas discovery has been made in a well in Ashok Nagar of 24 Parganas district in West Bengal, and testing is ongoing.

India has 26 sedimentary basins, of which only seven have commercial production of oil and gas. Except for the Assam shelf, ONGC opened up for commercial production all the other six basins, including Cambay, Mumbai Offshore, Rajasthan, Krishna Godavari, Cauvery, and Assam-Arakan Fold Belt.

ONGC share price ended the day up by 0.2%.