Stock markets in India are trading higher on firm rupee and positive global cues. Gains are largely seen in realty stocks and power stocks.
The BSE Sensex is trading up by 175 points and the NSE Nifty is trading up by 74 points. Meanwhile, the BSE Mid Cap index and the BSE Small Cap index both are trading up by 1.2%. The rupee is trading at 71.81 to the US dollar.
Pharma stocks are trading on a mixed note with & being among the top gainers. As per an article in a leading financial daily, the United States Food and Drug Administration (USFDA) has successfully completed inspection at Lupin's Nagpur facility, Maharashtra, India.
The inspection concluded without any observation. This inspection was a product-specific pre-approval inspection.
Lupin's Nagpur facility is the company's latest site and manufactures Oral Solid Dosage products. The site also houses Lupin's state of the art injectable manufacturing facility.
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.
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.
So, what is key to identifying potential multibagger stocks?
Most importantly, are there any stocks right now that could turn out to be multibaggers? Click here to know everything that you need to know right now about mutlibagger stocks...
Moving on to the news from the economy. Continuing declining trend for the second straight month, India's retail inflation based on Consumer Price Index (CPI) softened to a 10-month low of 3.7% in the month of August 2018, as compared to 4.2% in previous month (July), mainly on the back of easing prices of fruits, vegetables and other food items.
This was below the Reserve Bank of India's (RBI's) target of 4%. The previous low for CPI inflation was in October 2017, when it stood at 3.6%. Besides, consumer food price inflation, a metric to gauge changes in monthly kitchen costs, also eased to 0.3% in August 2018, compared with 1.5% rise in August 2017 and 1.3% in July 2018.
As per the data of the Central Statistics Office (CSO), Ministry of Statistics and Programme, the CPI (Rural, Urban, Combined) on Base 2012=100 for August 2018, stood at 3.4%, 4% and 3.7% respectively, compared to 3.2%, 3.4% and 3.3% respectively in August 2017.
According to the data, inflation of food and beverages eased to 0.9% in August 2018 from 1.7% in July 2018.
The inflation for housing eased to 7.6%, while that for miscellaneous items dipped to 5.5% in August 2018. The inflation for clothing and footwear was lower at 4.9%. There was a moderate increase in inflation in the fuel and light segment; it rose to 8.5% in August compared to about 8% in July.
However, at Equitymaster, we do not attempt to predict how and when macroeconomic developments will unfold. Instead, we focus on the fundamentals and the underlying business strength of companies.
The ValuePro team is always on the lookout for all-weather stocks whose fortunes are not tied to economic cycles.
To know what's moving the Indian stock markets today, check out the most recent share market updates here.
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