Stock markets in India edged higher in the afternoon session tracking gains in the Asian markets. Healthcare stocks, PSU stocks and capital goods stocks are witnessing maximum buying interest.
The BSE Sensex is trading higher by 258 points (up 0.8%), and the NSE Nifty is trading higher by 83 points (up 0.8%). Meanwhile, the BSE Mid Cap index and the BSE Small Cap index are trading up by 1.3% & 1.1% respectively. The rupee is trading at 73.43 to the US$.
ICICI Bank share price rose as much as 9% today, after it reported a bigger-than-expected 56% fall in Q2 net profit, but its asset quality improved. It had posted September quarter net profit of Rs 9.1 billion (US$123.75 million) compared with a loss in the June quarter.
In the news from pharma sector. Cipla has received final approval for its Abbreviated New Drug Application (ANDA) for Metoprolol ER Tablets 50mg, 100mg, 200mg from the United States Food and Drug Administration (USFDA).
Cipla's Metoprolol ER Tablets 50mg, 100mg, 200mg is AB-rated generic therapeutic equivalent version of Aralez Pharmaceuticals, Inc's, Toprol XL.
It is a beta-selective adrenoceptor blocking agent. Metoprolol succinate extended-release tablets are indicated for the treatment of hypertension, to lower blood pressure, Angina Pectoris, heart failure - for the treatment of stable, symptomatic (NYHA Class II or III) heart failure of ischemic, hypertensive, or cardiomyopathic origin.
According to IQVIA (IMS Health), Toprol XL and its generic equivalents had US sales of around US$464 millon for the 12-month period ending August 2018.
Cipla share price was trading up by 3.8% at the time of writing.
To know more about the company, you can access to Cipla's latest result analysis and Cipla's Stock Analysis on our website.
Moving on to the news from commodity space, market participants are closely tracking crude oil prices as the US and Saudi Arabia are pointing one another over the killing of journalist Jamal Khashoggi. On the other hand, global financial markets are looking at Saudi to produce extra crude oil after the US sanctions on Iranian oil take effect in a week's time.
Note that global crude oil prices witnessed buying interest on Friday last week amid concerns of tight supply after the US sanctions on Iran come into effect from November 4.
However, Saudi Arabia's claim that it will keep the market adequately supplied in the wake of the abovementioned sanctions has helped ease the situation.
Last week, Saudi Arabia said it would make up for supply disruptions from US sanctions that are targeting Iran's petroleum exports.
Saudi Energy Minister Khalid al-Falih said that despite expected supply disruptions from the US sanctions against Iran that kick in from November 4, Saudi Arabia would step up to meet any demand that materializes to ensure customers are satisfied.
Oil buyers are seeking alternatives ahead of the start of the US sanctions on November 4 and creating a challenge to other OPEC oil producers as they seek to cover the shortfall.
Market participants are worried that Iranian sanctions could severely undersupply the oil market in 2018 and that will mean further rise in crude oil prices.
Speaking of crude oil, oil prices have climbed steadily this year, helped by rising demand. However, rising crude oil prices doesn'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.
Apart from that, what does rising crude oil prices mean for stock markets?
Richa Agarwal, editor of Hidden Treasure, tracks the oil and gas sector very closely. She believes the rise in crude oil prices is a bearish sign for stock markets globally. At the same time, any market correction will throw up interesting buying opportunities in small-cap stocks.
This is what she wrote...
- After hitting a low of US$ 30 per barrel in January 2016, prices have more than doubled this year.
While the Hidden Treasure team looks for long-term wealth creators, such macro situations can help to recommend such stocks at a bargain. The ones who keeps calm, when everyone else is losing their heads, will gain the most when the tide turns.
It's also interesting to see how whenever oil prices have surpassed US$ 100/barrel, they didn't stay there for very long. In technical term, it is sort of 'resistance level'.
Resistance Kicks in Once Crude Touches US$ 100/barrel
This is what we wrote about this in one of the editions of The 5 Minute WrapUp...
- Oil prices have collapsed thrice because of demand destruction: in 1979, 2008, and 2014.
In 1979, the trigger for oil price increase was the Iranian Revolution and the Iran-Iraq war. Due to this, oil prices rose from US$ 50/barrel to above US$ 100/barrel between January 1979 and April 1981.
Then, new production from the North Sea, Mexico, Alaska, and Siberia flooded the market. By March 1986, prices had fallen to US$ 27/barrel.
In 2008, when oil touched US$ 150/barrel, it was quickly followed by the financial crisis and recession.
Then, between 2011 and 2014, when oil was above of US$ 100/barrel, several years of triple-digit oil prices led to a near doubling of shale production in the US, a volume that helped trigger the crash in 2014.
In fact, as per the media reports, even Saudi officials think US$60 is a reasonable price for oil in the long term.
It would be interesting to see how Iranian sanctions will influence crude oil prices. Meanwhile, we will keep you posted on all the updates from this space.
To know what's moving the Indian stock markets today, check out the most recent share market updates here.
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