Asian stock markets are higher today as Japanese and Hong Kong shares show gains. The Nikkei 225 is up 1% while the Hang Seng is up 0.1%. The Shanghai Composite is trading up by 0.3%. US stocks mostly edged higher on Monday, with the S&P 500 and Nasdaq rebounding to snap a four-day losing streak, although a drop in Apple kept gains in check.
Back home, India share markets have opened the day on a flat note with a negative bias. The BSE Sensex is trading down by 50 points while the NSE Nifty is trading down by 8 points. The BSE Mid Cap index and BSE Small Cap index both opened the day up by 0.1%. The rupee slipped to new low of 71.43 per dollar in opening trade.
Sectoral indices have opened the day on a mixed note with healthcare stocks and information technology stockswitnessing maximum buying interest. While, FMCG stocks and consumer durables stocks opened the day in red.
In the news from the pharma sector. As per an article in a leading financial daily, Sun Pharmaceutical Industries has agreed to acquire 18.8% shares of Israel-based Tarsius Pharma for a cash consideration of US$ 3 million (over Rs 210 million).
One of the company's wholly-owned subsidiaries has agreed to acquire 3,45,622 ordinary shares of Tarsius Pharma.
Tarsius is an early stage research and development company focusing on development of drug candidates in the field of ophthalmology.
Meanwhile, two days after the US Food and Drug Administration (USFDA) issued six observations related to deficient procedures at Sun Pharma's Halol manufacturing facility, the regulator also turned up the heat on the drug company's Mohali plant in Punjab.
Reportedly, the regulator has started a three-day surprise inspection at the plant on Monday.
The Mohali facility, which belonged to Ranbaxy Laboratories Ltd, had been under an import alert by the FDA in 2013, two years before Sun Pharma completed its US$4 billion acquisition of Ranbaxy.
Sun Pharma share price opened the up by 0.4%.
To know more about the company, you can access to Sun Pharma's Q1FY19 result analysis and Sun Pharma's Stock Analysis on our website.
Moving on to the news from the currencies space. The Indian rupee on 10 September 2018 ended the session on a record low note of 72.45 per US$.
Multiple factors such as global trade war concerns, selloff in emerging markets along with worries on domestic macro front after trade and current account deficits widened, weighed on it.
The currency did manage to recover from its low points, an intraday low of 72.67 per US$. On Friday, the currency had closed at 71.73 per US$.
Talking about currency wars and the falling rupee, Kunal Thanvi, editor of Smart Money Secrets did a small exercise to understand the impact of the weak rupee on the markets.
Should You Be Worried About the Rising Dollar?
India is a net importer. This means if the rupee is weak, the cost of imports increases and value of the export decreases - resulting in a widening current account deficit.
A high current account deficit also impacts the government's spending power.
Also, companies which import raw material witness pressure on their margins and profitably. Here's an excerpt of what Kunal wrote in the recent edition of The 5 Minute WrapUp:
- "So, this looks quite negative on the face of it. So, it's not surprising that markets get volatile when the currency depreciates.
Look at Indian rupee against the dollar from 1990. It has deprecated at a compounded annual rate of 5%.
Yes, the dollar has been on a winning streak from the beginning.
And despite that... the BSE Sensex has returned 14% compounded annually since 1990.
Thus, the falling rupee can bring volatility to the market in the short-term. But in the long-term, our market should be fine.
This is exactly what I keep in mind when picking stocks for Smart Money Secrets subscribers. I cut out the noise of short-term disruptions and look at the long-term picture beyond."
To know what's moving the Indian stock markets today, check out the most recent share market updates here.
This article was originally published in English at www.equitymaster.com
Read the complete Indian stock market update. For the terms of use, go here.
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