Stockmarkets, inflation and more... - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Stockmarkets, inflation and more...

Apr 1, 2008

  • Indian stockmarkets continue to dance to the tunes of their global counterparts as was amply demonstrated in yesterday's trading session, which saw the BSE-Sensex shed nearly 725 points (down 4%) following the weakness in the US and European markets. In fact US markets were hampered on Friday following a profit warning from JC Penney, a large retailer in the US despite encouraging readings on personal incomes, which registered an increase. Having said that, consumer spending rose just 0.1%, the smallest rise since September 2006. Meanwhile, the Federal Reserve continues to be active in bailing out the financial system from its worst ever crisis and had announced that it would make an additional US$ 100 bn available to cash-deficient banks during the month of April, as part of its ongoing plan to help unfreeze the credit markets. This has, however, not insulated the US markets from bouts of volatility and this nervousness has had an effect on other markets across the globe as well.

  • India's inflation surged to 6.68% for the week ended March 15, 2008 marking a 13-month high. This is following 5.92% that was recorded a week earlier and has now dampened chances of the RBI softening interest rates. The spike has been attributed to rising food prices, which besides afflicting India has weighed heavy on world economies as well. A spurt in steel prices too has contributed to the rise in India's inflation. This is expected to put pressure on the central bank to suggest some monetary adjustments so that the impact of rising prices is lowered on consumers. Already the government has announced measures to reduce import duties on certain products. Whether this will cool down inflation remains to be seen. Meanwhile, given the firm crude oil prices, the pressure on domestic energy prices is also expected to increase, thus having the potential to increase inflation at a higher rate going forward.

  • R&D efforts of global pharma companies received a setback last week when it was reported that the cholesterol reducing drug 'Vytorin', a combination of Merck's 'Zocor' and Schering Plough's 'Zetia', was not found to be more effective than cheaper generic versions. These findings have been published after two years of study on the drug, which has elicited considerable criticism. 'Vytorin' is a blockbuster drug having generated revenues to the tune of US$ 5 bn. Global innovator companies are facing increasing pressure in recent times given the patent expiries of their blockbuster drugs resulting in nearly 90% erosion in prices and drying research pipelines. Many of them are resorting to a host of strategies, which include extending the patents on their blockbuster drugs, in-licensing molecules from small research companies, acquiring companies with a promising research pipeline and focusing on biotechnology, which is a very niche and highly lucrative field. The US FDA has also been stringent in approving new drugs in light of the 'Vioxx' debacle (Merck had to withdraw the drug from the market) and the controversy surrounding anti-diabetic drug 'Avandia', which has been associated with increasing the rate of heart attacks. Thus, the going may not be that easy for domestic pharma companies whose R&D programmes are still in their nascent stages.


Equitymaster requests your view! Post a comment on "Stockmarkets, inflation and more...". Click here!

  

More Views on News

BSE Sensex Surges 600 Points; BAJAJ AUTO Among Top Gainers (Market Updates)

Oct 1, 2020 | Updated on Oct 1, 2020

The BSE Sensex Surged 600 Points; BAJAJ AUTO Among Top Gainers. Find the latest update, special reports and news on all time high gainers of BSE Sensex at equitymaster.com.

Nippon India Nifty Smallcap 250 Index Fund: High Risk in Passive Mode (Outside View)

Oct 1, 2020

PFN explains about the Nippon India Nifty Smallcap 250 Index Fund.

You Should Be looking for Small-cap Stocks that Will Rebound Strongly (Profit Hunter)

Oct 1, 2020

This single trait in excellent small cap businesses differentiates them from the rest.

This Number Will Give You an Edge Over Other Traders in the Market (Fast Profits Daily)

Sep 30, 2020

In this video, I'll share with you, a crucial number that I track everyday which gives me trading edge.

Is Mirae Asset Ultra Short Duration Fund a Right Solution for Your Short Term Needs? (Outside View)

Sep 30, 2020

PFN explains about the Mirae Asset Ultra Short Duration Fund.

More Views on News

Most Popular

Will the IPOs in 2020 Be as Rewarding as the Ones in 2019

In 2017 funds raised through IPOs is highest over a decade. And the stock market still flying high, some observers are predic...

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

Can the Nifty Fall to 10,200? (Fast Profits Daily)

Sep 24, 2020

The Nifty has reached an important support level today. If it breaks then we could see further downside.

I Believe These Stocks Will Deliver the Most Outsized Returns in 2021 and Beyond (Profit Hunter)

Sep 23, 2020

Rules of the racetrack can help you bag the biggest gainers of the coming decade.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Oct 1, 2020 01:57 PM

MARKET STATS