After witnessing volatile trades during the day, Indian share markets ended their session marginally lower. Losses were largely seen in the banking sector, consumer durables sector and FMCG sector, while IT stocks ended the day higher.
At the closing bell, the BSE Sensex stood lower by 85 points (down 0.2%) and the NSE Nifty closed lower by 26 points (down 0.2%). The BSE Mid Cap index ended the day down by 0.2%, while the BSE Small Cap index ended the day down by 0.3%.
Asian stock markets finished on a mixed note as of the most recent closing prices. The Hang Seng was down 0.43% and the Nikkei stood up by 0.84%.
The rupee was trading at 69.94 to the US$ at the time of writing.
In the news from global financial space, stocks in Europe were trading higher alongside US equity-index futures after a mixed session in Asia as trade negotiations with China drew a blank. The dollar slipped before an address from Federal Reserve Chairman Jerome Powell.
Investors hoping for good news on global trade were left disappointed after the US talks with China ended with increasing likelihood that tit-for-tat tariffs will escalate.
The focus has now shifted back to Fed policy, with market participants clinging to bets for two rate hikes by year-end.
In the news from the pharma space, Cadila Healthcare share price was in focus today as the company reported that the US Food and Drug Administration (USFDA) completed an inspection at the company's Biologics manufacturing facility (Zydus Biologics) located at the Zydus Biotech Park in Ahmedabad.
At the closing bell today, Cadila Healthcare share price ended the day up by 1.7% on BSE.
In the news from commodity space, crude oil is witnessing buying interest today. Gains are seen on the back of signs that US sanctions on Iran are already reducing global crude supply.
Note that the US government re-imposed sanctions on Iran this month after withdrawing from a 2015 international nuclear deal.
Apart from that, crude oil was also witnessing buying interest as China imposed a 25% tariff on US oil products.
Speaking of crude oil, oil prices have climbed steadily this year, helped by rising demand. However, rising crude oil prices don't bode well for the Indian economy, as it not only affects fuel prices but also has many other repercussions on the macroeconomic level.
They can be a big worry for the Modi government as well as it has been a big beneficiary of lower crude oil prices.
Have a look at the chart below. It shows India's total import bill of crude oil and petroleum products on an annual basis during the Manmohan Singh regime and the Narendra Modi regime.
Here's Why Crude Oil Was Modi's Best Friend So Far
As Ankit Shah wrote in one of the editions of The 5 Minute WrapUp...
- During the UPA II regime, India's average annual oil import bill was US$ 133 billion. In fact, in the last three years of Manmohan Singh's leadership, the oil import bill exceeded US$ 150 billion. Compare that with an average annual oil bill of US$ 95 billion during the four years of Modi's leadership.
The actual savings would have been even higher, because I believe the consumption of crude oil and petroleum products would have been quite higher in the Modi era than the Manmohan era.
Last Thursday, Brent crude oil prices shot above US$ 80 a barrel.
This is the highest level since 2014. In the past one year alone, oil prices have surged more than 50%.
Now, what if oil prices go back to the levels during the Manmohan Singh regime? What would happen to India's current account and fiscal deficit? What would happen to inflation and RBI's stance on interest rates?
With the next general elections just a year away, rising crude oil prices are going to be a big worry for the Modi government.
It should worry you too...
Apart from that, what does rising crude oil prices mean for stock markets?
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