After opening the day in green, share markets in India witnessed volatile trading activity throughout the day and ended the day flat. Sectoral indices ended the day mixed, with stocks in the pharma sector and stocks in the IT sector leading the gains, while stocks in the metal sector lost the most.
At the closing bell, the BSE Sensex stood lower by 45 points (down 0.1%) and the NSE Nifty closed up by 4 points (up 0.1%). The BSE Mid Cap index ended the day up 0.4%, 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 up by 0.5%. The Nikkei 225 was down by 0.1%. Meanwhile, European markets too were trading on a negative note. The FTSE 100 was down by 0.4%, The DAX, was down by 0.8% while the CAC 40 was down by 1.2%.
The rupee was trading at Rs 70.91 against the US$ in the afternoon session. Oil prices were trading at US$ 77.5 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 next 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 steel sector. Steel Authority of India Ltd (SAIL) share price was in focus today after it was reported that the company declined paying dividend to the government citing a shortage of cash.
According to reports, the steel major declined a government call for a dividend for the last financial year, saying it did not have any cash and bank balance and that its debt-to-income ratio was much higher than agreed with some lenders.
SAIL's refusal could make it harder for the government to meet its budgeted target of raising Rs 1.06 trillion from dividends and profit of state-owned companies.
SAIL share price ended the day down by 1.6%.
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