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Trump's Trade War; Upcoming IPOs & Top Stocks to Watch Out for Today
Wed, 6 Mar Pre-Open

On Tuesday, the Indian share markets ended over 1% higher led by gains in ICICI Bank, Axis Bank, HDFC Bank, ITC and Reliance Industries. Market participants looked beyond US President Donald Trump's plans to end key trade benefits for India.

At the closing bell, the BSE Sensex ended at 36,443, up 379 points while the broader Nifty index settled at 10,987, up 123 points.

Extending their recent outperformance, the midcap and smallcap stocks surged yesterday. The BSE midcap index surged 2% while smallcap index rose 3%.

The rupee appreciated by 11 paise to 70.81 against the US dollar in opening trade on Tuesday, driven by weakening of the greenback in overseas markets and fresh foreign inflows.

Donald Trump's Plans to End India's Key Trade Preference

A threat from US President Donald Trump to end India's preferential trade treatment under the Generalized System of Preferences (GSP) programme spooked domestic stocks in early trade on Tuesday, but they pared losses to trade in the green within two hours.

The GSP programme allows US$5.6 billion worth of Indian exports to enter the US duty-free.

Trump's threat came at the time when India has been trying to cope with sluggish exports growth. Any withdrawal of trade preferences may impact the rupee as well as.

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

Top Stocks in Focus

Bank of Baroda share price will be in focus today as the bank has revised its one-year Marginal Cost of Funds based Lending Rate (MCLR) to 8.65% per annum (p.a.) with effect from 7 March 2019.

Alembic Pharmaceuticals will be watched out for today as company's joint venture Aleor Dermaceuticals has received approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) Clobetasol Propionate Ointment USP, 0.05%.

Meanwhile, Lupin and Natco Pharma announced the final ANDA approval for lmatinib Mesylate Tablets, from the USFDA to market a generic version of Novartis Pharmaceuticals Corporation's (Novartis) Gleevec Tablets.

Tata Motors wholly owned subsidiary, Jaguar Land Rover (JLR) has reported 11,616 units US sales for the month of February 2019, a 29% increase from 9,013 units in February 2018. The stock will hog limelight today.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Global Stock Market Drivers

European stocks and US futures edged higher following a mixed session in Asia as investors awaited further signs of a possible Sino-American trade deal. Treasuries dipped while the dollar strengthened for a fifth day.

Earlier, shares declined in Japan, Korea and Australia and posted modest gains in China as Premier Li Keqiang's annual work report to the National People's Congress showed a lower target for gross domestic product growth. Chinese officials also announced a cut of 3 percentage points to the top bracket of value-added tax.

Trade and slowing growth are on the agenda as China's most powerful officials gather in Beijing, while investors will get the latest read on the US economy with the monthly jobs report Friday.

Here are some key events coming up:

  • Bank of Canada Governor will announce its interest rate decision today amid lingering uncertainty on housing and investment, while sticking to his message that borrowing costs eventually need to head higher.

  • European Central Bank policy makers are expected to leave rates unchanged amid a deteriorating outlook. President Mario Draghi will hold a news conference on Thursday after the decision.

  • The US jobs report will be released on Friday.

    • Oil Prices Fall

    Oil prices fell on Tuesday as China cut its 2019 economic growth target, dimming the outlook for fuel demand, although OPEC led efforts to cut output still offered some support.

    US West Texas Intermediate (WTI) crude oil futures were at US$ 56.31 per barrel, down 0.5% from their last settlement.

    Brent crude futures were at US$ 65.37 per barrel, down 0.5%.

    From the IPO space...

    As per an article in a leading financial company, e-commerce company MSTC Ltd has got approval from the market regulator for the state-run firm's proposed IPO.

    The IPO would be by way of offer for sale by the Union government of 17.6 million shares, equivalent to 25% of the post-offer, paid-up equity share capital.

    The divestment would bring down government holding in MSTC to 64.9% from the existing 89.9% stake, the company said.

    Meanwhile, State-owned Telecommunications Consultants India Ltd (TCIL) expects to raise Rs 15 billion from its planned IPO, and wants to retain a part of the proceeds, Rs 6 billion for expansion and working capital needs.

    Reportedly, the proposed IPO is likely to hit the market sometime in the middle of this year. TCIL is among the six Central Public Sector Enterprises that the government proposes to list on stock exchange through public issue.

    We will keep you updated on all the developments from this space. Stay tuned.

    Also, speaking of IPOs, we at Equitymaster believe a merit-based selection, primarily including valuation, business, and management quality, is the logical way to go about investing in IPOs.

    If it means going against the herd, so be it. And going by recent past, this strategy has been proven to be successful more often.

    To know how to safely profit from the ongoing IPO rush, download this FREE report now and discover How to Get Rich with IPOs.

    For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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