Asian stock markets are lower today as Japanese and Hong Kong shares fall. The Nikkei 225 is off 0.8% while the Hang Seng is down 0.4%. The Shanghai Composite is trading up by 1.1%. Wall Street stocks tumbled on Thursday as US Treasury yields continued their ascent to multi-year highs on the latest round of strong economic data, building concerns for an acceleration of inflation.
Back home, India share markets opened lower today after the government moves raised fear of subsidy burden on PSU oil companies. GAIL cracked 10% and ONGC plunged 12%. MRPL was down 10%. HPCL, BPCL and IOC crashed another 20-25% on government move.
The BSE Sensex is trading down by 135 points while the NSE Nifty is trading down by 76 points. The BSE Mid Cap index opened down by 1.1% while BSE Small Cap index opened the day up by 0.1%.
Sectoral indices have opened the day on a mixed note with oil & gas stocks and PSU stocks witnessing maximum selling pressure.
The rupee is trading at Rs 73.49 against the US$.
Note that crude oil prices are witnessing buying interest lately. This doesn't bode well for the Indian economy, as it not only affects fuel prices, but also has many other repercussions on the macroeconomic level.
Rising crude oil prices can be a big worry for the Modi government as well as it has been a big beneficiary of lower crude oil prices.
It's also interesting to note that whenever oil prices have surpassed US$ 100/barrel, they didn't stay there for very long. In technical term, it is a sort of 'resistance level'.
Resistance Kicks in Once Crude Touches US$ 100/barrel
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.
In the news from the pharma sector. As per an article in a leading financial daily, Lupin has launched in the US its generic potassium chloride oral solution. It is used for prevention and treatment of low blood levels of potassium.
The company has launched the solution in the US in the strengths of 20 mEq/15mL (10%) and 40 mEq/15 mL (20%).
The firm had earlier received approval for the product from the United States Food and Drug Administration (USFDA), the reports noted.
Further, the company's product is the generic version of the Genus Lifesciences Inc's potassium Chloride oral solution.
As per IQVIA MAT June 2018 data, potassium chloride oral solution USP, 20 mEq/15mL (10%) and 40 mEq/15 mL (20%), had annual sales of around US$185 million in the US market.
Lupin share price opened the day up by 1.1%.
To know more about the company, you can access to Lupin's Q1FY19 result analysis and Lupin's 2017-18 Annual Report Analysis on our website.
Moving on to the news from the banking sector. In the latest development, Life Insurance Corporation of India (LIC) on Thursday came out with an open offer for acquiring 26% of the equity in IDBI Bank at a price of Rs 61.73 per share, entailing total payout of over Rs 126.02 billion.
Earlier in the day, IDBI Bank board approved the proposal for issuance of preferential shares in favor of LIC with a view to increase the share of the insurer in the bank up to 51%.
LIC's open offer is triggered after the government transferred 43% of its stake in IDBI Bank to the insurance company, which resulted in LIC's holding rising to 51%. This essentially means the government will be left with around 43% stake, while public shareholders will hold 6% stake.
According to the open offer, LIC proposes to acquire more than 2.04 billion equity shares of Rs 10 each, equivalent to 26% equity of IDBI Bank. This means LIC will have to buy at least 20% more from the government while the rest can be tendered by the public shareholders in the public offer, the reports noted.
The government has already approved the proposal of LIC to increase the stake in IDBI Bank.
IDBI Bank board on Thursday also approved increasing authorized capital of the bank from Rs 80 billion to Rs 150 billion. The meeting also cleared a proposal for re-classification of LIC as a promoter of the bank post-acquisition of 51% stake in IDBI Bank.
The board also approved alterations in the Articles of Association of the bank. Union cabinet on 1 August cleared a proposal for purchase of 51% controlling stake in IDBI by LIC.
IDBI bank share price opened the day up by 1.1%.
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