Stock markets in India are trading over 1% lower taking cues from their global peers, which fell amid reports that the US was about to announce a new round of tariffs on Chinese imports. Losses are largely seen in bank stocks and FMCG stocks.
The BSE Sensex is trading down by 384 points and the NSE Nifty is trading down by 102 points. Meanwhile, the BSE Mid Cap index and the BSE Small Cap index are trading down by 0.5% & 0.1% respectively. The rupee is trading at 72.56 to the US dollar.
Pharma stocks are trading on a mixed note with Aarti Drugs & Divis Laboratories being among the top gainers. As per an article in a leading financial daily, Glenmark Pharmaceuticals Inc., USA has been granted final approval by the United States Food & Drug Administration (USFDA) for Estradiol Vaginal Inserts USP, 10 mcg.
Reportedly, the drug is a generic version of VAGIFEM 1, 10 mcg, of Novo Nordisk Inc.
According to IQVIA sales data for the 12-month period ending July 2018, the VAGIFEM, 10 mcg market achieved annual sales of approximately US$286.3 million.
Note that, Glenmark's current portfolio consists of 139 products authorized for distribution in the US marketplace and 61 ANDA's pending approval with the USFDA.
Speaking of pharma stocks, the rupee's recent weakness has pushed up the BSE healthcare index, which was (26% down) at the bottom of the market for the past three years. However, the index has been the top performer in the past month and is up 11%.
In the past three months, the BSE healthcare index has gained as much as 23%. In comparison, BSE Sensex is up about 9% during the same period.
Among the individual stocks, Sun Pharmaceutical Industries, Dr. Reddy's Laboratories, Aurobindo Pharma, and Glenmark Pharma outperformed the index by gaining in the range of 24% to 36%, while Divi's Laboratories and Lupin were up 13% and 10%, respectively.
Beating the Benchmark
In such an environment, it makes sense for investors to be selective while buying stocks. Focus on value and the underlying fundamentals of the business.
Moving on to the news from the economy. Continuing growth momentum for the fifth straight month, India's merchandise exports rose at the fastest pace in three months in the month of August 2018, mainly on the back of healthy growth in petroleum products, engineering, pharma, and gems and jewelry shipments.
Besides, imports too grew due to costlier crude oil shipments. However, during the reporting month, the trade deficit narrowed to US$17.4 billion as against US$12.7 billion in the same month last year.
In July, the trade deficit soared to a nearly five-year high of US$18 billion. Moreover, taking merchandise and services together, the overall trade deficit for April-August 2018-19 is estimated at US$47.7 billion as compared to US$39 billion in April-August 2017-18.
As per the data released by the Commerce Ministry, exports grew by 19.2% to US$27.8 billion in August 2018, as compared to US$23.4 billion in the same month a year ago.
In Rupee terms, exports were higher by 29.6% to Rs 1,936.3 billion in August 2018, as compared to Rs 1,494 billion in August 2017. Cumulative value of exports for the period April-August 2018-19 was US$136.1 billion as against US$117.2 billion during the period April-August 2017-18, registering a positive growth of 16.1% over the same period last year.
Imports during August 2018 increased by 25.4% to US$45.2 billion as compared to imports of US$36.1 billion in August 2017, while in rupee terms it was up by 36.3% to Rs 3,146 billion from Rs 2,307.4 billion in August 2017.
Cumulative value of imports for the period April-August 2018-19 was US$216.4 billion, as against US$184.5 billion during the period April-August 2017-18, registering a positive growth of 17.34% over the same period last year.
Oil imports in August 2018 were US$11.8 billion, which was 51.6% higher, compared to US$7.8 billion in August 2017. Non-oil imports in August 2018 were estimated at US$33.4 billion which was 18.2% higher, compared to US$28.3 billion in August 2017.
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