Sensex Nosedives 488 Points, US-China Trade War, and Top Cues in Focus Today

Thu, 9 May Pre-Open

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India share markets witnessed huge selling pressure yesterday and ended their trading session deep in the red. Most of the losses were seen on the back of weak global cues.

At the closing bell yesterday, the BSE Sensex stood lower by 488 points (down 1.3%) and the NSE Nifty closed down by 138 points (down 1.2%).

The BSE Mid Cap index ended the day down 1%, while the BSE Small Cap index ended the day down 1.2%.

Sectoral indices ended in the red with stocks in the realty sector and energy sector witnessing most of the selling pressure.

Top Stocks in Focus Today

From the pharma sector, Alembic Pharmaceuticals share price will be in focus today as the company announced that it has entered into a Joint Venture Agreement (JVA) with SPH SINE Pharmaceutical Laboratories, China (SPH Sine) & Adia (Shanghai) Pharma, China (Adia) to promote and sell pharmaceutical products for the Chinese market.

Initially this JV will commercialize products manufactured by Alembic Pharmaceuticals. Subsequently the JV plans to set up a manufacturing facility in China.

To know more about the company, you can access to Alembic Pharma's Q3FY19 result analysis and Alembic Pharma's 2018-19 Annual Report Analysis on our website.

Natco Pharma share price will also be in focus today as the company said its marketing partner Alvogen has received final Abbreviated New Drug Application (ANDA) nod from the US Food and Drug Administration (USFDA) for chest pain tablets.

From the banking sector, market participants will be tracking Yes Bank share price as the stock of the lender continued its downtrend for the third consecutive session yesterday.

Note that the stock has been in the negative territory since Monday, May 6, 2019 after domestic rating agency ICRA downgraded the bank's long-term bond ratings and gave a guidance with a negative outlook.

US-China Trade War and its Impact on Global Currencies

In the news from the global financial markets, as per a leading financial daily, Chinese Vice Premier Liu will travel to US for two days of trade talks this week setting up a last-ditch bid for a deal that would avoid a sharp increase in tariffs on Chinese goods ordered by US President.

During a 10-month US-China trade war, US tariffs have been imposed on US$250 billion worth of Chinese goods, and retaliatory Chinese tariffs slapped on US$110 billion worth of American products.

The above developments have also weighed on major global currencies.

The Indian rupee witnessed selling pressure against the US dollar yesterday majorly on the back of above news.

Further, losses in the domestic equity market and a strengthening dollar against major currencies overseas amid trade worries also weighed on the rupee.

On the global front, growing fears about the impact of a worsening US-Sino trade conflict on global growth lifted the safe-haven Japanese yen to a six-week high against the dollar yesterday.

Note that stock markets in China fell as much as 6% on Monday after US President Donald Trump threatened to raise tariffs on all Chinese imports to 25%.

The US president made the above threat in a pair of tweets on Sunday - just a few days ahead of a round of trade negotiations scheduled to begin on Wednesday.

He tweeted that levies imposed on Chinese goods over the past year as part of the trade war with Beijing were partially responsible for great economic results in the US and had little impact on product cost.

He further added that the current 10% tariffs on US$ 200 billion worth of Chinese goods would rise to 25% on Friday, and that US$ 325 billion of additional Chinese goods that were currently untaxed would shortly be subject to tariffs of 25%.

The above news sent China's CSI 300 index of major Shanghai and Shenzhen-listed stocks down as much as 6.1%. This was the benchmark's worst day since February 2016.

The above development follows trade war between the world's top two economies after Trump administration last year published a list of about 1,300 Chinese exports worth US$ 50 billion that could be hit by US tariffs because of Beijing's alleged theft of intellectual property and technology. China hit back with a levy 25% tariffs on imports of 106 US products.

The tit-for-tat tariffs are part of a wider clash looming over trade between the world's two biggest economies.

How this pans out forward remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

BSE Board Approves Buyback

BSE share price will be in focus today as the company's board has approved buyback of 67.7 lakh shares.

The company plans to buy back its fully paid up equity shares of Rs 2 each at Rs 680 per equity share through tender offer route. The total amount of buyback size will be a maximum of Rs 4.6 billion.

The company proposes to buy back 67.64 lakh equity shares an offer price, representing 13.06% of the total paid-up equity capital. The buyback offer size represents 24.73% of aggregate of the total paid up capital and free reserves.

Apart from the above, the company also reported standalone net profit of Rs 2 billion during 2018-19. The operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) was Rs 253 million as per standalone results.The board of the company also recommended payment of dividend of Rs 25 per equity share of face value of Rs 2 each.

After taking into account the interim dividend of Rs 5 per share paid in the month of December 2018, the total dividend for the financial year stands at Rs 30 per equity share of face value of Rs 2 each.

To know more on what moved the Indian stock markets today, you can check out the most recent share market updates here.

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