Asian stocks are lower today as Japanese and Hong Kong shares fall. The Nikkei 225 is off 1.4% while the Hang Sengis down 1.2%. The Shanghai Composite is trading down by 0.9%. US stocks gained over the weekend.

Back home, India share markets have opened the day on a flat note. The BSE Sensex is trading down by 10 points while the NSE Nifty is trading down by 5 points. The BSE Mid Cap index opened the day down by 0.2% while BSE Small Capindex opened the day up by 0.5%.

Sectoral indices are trading mixed with energy stocks and consumer durables stocks witnessing maximum selling pressure. While IT stocks & healthcare stocks have opened the day in green.

The rupee is trading at Rs 73.91 against the US$.

In the news from the pharma sector. As per an article in a leading financial daily, Dr Reddy's Laboratories' US arm is recalling over 35,000 tubes of Nystatin and Triamcinolone Acetonide cream on account of failed stability specifications.

As per the US health regulator's Enforcement Report, Dr. Reddy's Labs Inc is recalling 35,020 tubes of Nystatin and Triamcinolone Acetonide Cream, USP, 1,00,000 units/gm and 1 mg/gm from the American market.

The recall is because failed stability specifications, an out of specification result was observed for the test parameter: composition of Nystatin during stability testing.

The cream is used for the treatment of cutaneous candidiasis, a skin infection.

The voluntary ongoing nationwide recall is a class II recall.

As per USFDA, a class II recall is initiated in a situation in which use of, or exposure to, a violative product may cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote.

Dr. Reddy's Lab share price opened the day up by 2.2%.

In another development, India's retail inflation accelerated in September, though it remained within the central bank's permissible limit, and factory output fell to a three-month low in August because of a higher base effect.

As per the data released by the Central Statistics Office on Friday, Consumer price index (CPI)-based inflation rose from 3.69% in August to 3.77% in September while the index of industrial production (IIP) fell from 6.5% in July to 4.3% in August.

The volatility in the IIP growth rate indicates that industrial recovery remains uneven and fragile ahead of the festive season. The Reserve Bank of India's (RBI's) latest business expectations index, however, shows industrial activity improved in the July quarter.

Reportedly, the depreciating rupee and rising crude oil prices and revision in minimum support prices for farm produce are expected to put upward pressure on retail inflation.

After two successive hikes, the RBI's monetary policy committee (MPC) kept interest rates unchanged on 5 October, citing a benign inflation trajectory and a downward revision of inflation projections.

The MPC lowered its inflation projection to 3.9-4.5% from 4.8% for the second half of the current financial year.

As per our Co-head of Research, Tanushree Banerjee, when inflation is on the rise you must do the math of 'investor's misery index'.

Take into account the potential rise in inflation and the amount of capital gains tax you will be paying. If the sum of the two is higher than the return on equity of a stock, it ranks high on the misery index.

Stocks that fail to pass the return on equity 'hurdle rate' will sooner or later get dumped.

The Worst Years in Stock Market - When Inflation Rose and Return Ratios Fell

If we look at the stocks in the BSE 100 index, the 3 phases when inflation rose and return ratios fell (1993, 1995, and 2008) were amongst the worst years in stock markets.