Stock markets in India pared gains to turn flat as the rupee continues to remain weak after 6 straight sessions of fall. Losses are largely seen in metal stocks and FMCG stocks.
The BSE Sensex is trading up by 47 points and the NSE Nifty is trading up by 6 points. Meanwhile, the BSE Mid Cap index and the BSE Small Cap index both are trading flat. The rupee is trading at 71.93 to the US dollar.
Pharma stocks are trading on a mixed note with Biocon & Aarti Drugs being among the top gainers. As per an article in a leading financial daily, Aurobindo Pharma's wholly owned subsidiary, Aurobindo Pharma USA Inc., has entered into an agreement to acquire commercial operations and three manufacturing facilities in the USA from Sandoz Inc., USA, a Novartis Division.
Reportedly, the acquisition will provide a unique opportunity to acquire a premier US generics business with a sizable and broad portfolio across key therapeutic areas.
The acquisition is expected to be completed during the calendar year 2019.
At the time of writing, Aurobindo Pharma share price was trading up by 5.7%.
Moving on to the news from the steel sector. ICRA in its latest report has said that sharp depreciation in the Indian rupee may help the domestic steel industry lower imports and boost exports in the coming months. Accordingly, this is likely to improve the country's overall steel trade balance.
The report highlighted that in the first quarter of the current financial year (Q1FY19) steel exports declined by over 33%, whereas imports rose by over 11%, and as a result, the country turned a net steel importer, after having been a net exporter for the last two years.
Besides, it stated that while the consumption levels are likely to ease in a seasonally weak second quarter, government's continued thrust on infrastructure spends and expected improvement in rural demand on the back of higher minimum support prices (MSPs) is expected to drive the steel consumption growth momentum in the coming months.
The report also underlined that domestic steel consumption grew at a healthy pace of 9.2% year-on-year in June quarter, compared with 7.9% in FY18, driven by strong automobile sales growth and a further uptick in demand for longs by the construction sector before the onset of the monsoon.
Moreover, the country's finished steel production growth improved to 5.3% Y-o-Y in June quarter, from 3.1% in FY18.
Additionally, ICRA is expecting a sequential easing in operating profitability of the industry in September quarter on account of moderation in demand and increased raw material costs.
It added that higher absorption of steel in the domestic market kept steel exports low, despite remunerative international prices.
Speaking of steel sector woes, the country's steel industry was just coming out of a rough patch.
Demand was picking up. Steel prices were on the rise. Buyers were lining up to pick up stressed assets. With the expected pick up in the investment cycle, the sector was on the upswing.
India's Steel exports were on a roll.
Is the Steel Sector's Recovery Under Threat?
Then Donald Trump spoiled the party. The US government plans to impose a 25% tariff on steel and a 10% tariff on aluminum.
India produces a lot of both commodities but internationally, we are not a big player. The US imports only 2.4% of steel and 2% aluminum from India.
During times like these, the best thing you can do is to identify stocks that can ride out the storm.
Steel stocks are trading on a mixed note with Tayo Rolls & Jindal Saw leading the gainers.
Comments
Log in or sign up to join the conversation.