Stock markets in India trim losses to turn flat even as the Rupee fell 43 paise to hit a record low of 70.29 against the US dollar as concerns about Turkey's economic woes spreading to other emerging markets such as India persisted. Losses are largely seen in realty stocks and metal stocks.

The BSE Sensex is trading down by 32 points and the NSE Nifty is trading down by 9 points. Meanwhile, the BSE Mid Cap index is trading up by 0.1% while, the BSE Small Cap index is trading up by 0.4%.

Notably, the Indian stock market has had a hard time of it in 2018.

But a look at the Sensex would suggest just the opposite. The BSE Sensex is up by 11.4% in the current year.

Sensex Return Skewed by Top 12 Stocks

The real picture can't be further from the truth. Only 12 stocks are responsible for Sensex touching their lifetime highs. TCS, Infosys, Reliance along with a few other stocks have led to this outperformance.

The top 12 stocks have returned 25.5% on an average while the other 19 stocks in the Index have declined by 12% on an average.

Corporate governance issues at mid and small cap companies have led to their corrections from sky-high valuations a year ago.

Even among Sensex stocks, Tata Motors, Vedanta, and Bharti Airtel have performed poorly due to structural issues in their businesses.

What happens when the top 12 fail to meet the market's expectations?

There is a strong possibility they might take down the other 19 stocks and the index further with them. In such a situation, despite the recent correction, mid and small caps won't be safe either.

In the latest edition of our stock market podcast, I talk to Tanushree Banerjee, Co-head of Research, about how to invest in volatile markets like these. Have a question for Tanushree? Write in. Don't miss it! Sign up for our free podcast today. Visit SoundCloud, iTunes or Stitcher.

In news from the pharma sector. As per an article in a leading financial daily, Sun Pharmaceutical Industries including its subsidiaries and/or associate companies has received approval for CEQUA (cyclosporine ophthalmic solution) 0.09%, from the US Food and Drug Administration (USFDA).

Reportedly, CEQUA is indicated to increase tear production in patients with keratoconjunctivitis sicca (dry eye).

CEQUA provides the highest FDA-approved concentration of cyclosporine A (CsA) and is the first and only approved CsA product that incorporates a nanomicellar technology.

The innovative nanomicellar formulation allows the CsA molecule to overcome solubility challenges, penetrate the eye's aqueous layer and prevents the release of the active lipophilic molecule prior to penetration.

Moreover, the company launched gWelchol and Yonsa in the US. As per the reports, other specialty product launches, namely Ilumya (in Q2FY19) and OTX-101 are scheduled for 2018-19.

The management awaits approval of other specialty products, Xelpros and Elepsia, from the Halol facility during the year. Specialty products are going to be one of the key growth drivers, with India, emerging market and rest of the world (ROW) businesses being the other drivers.

Meanwhile, Sun Pharma on Tuesday reported a consolidated net profit of Rs 9.8 billion for the June quarter. It had registered a net loss of Rs 4.2 billion in the year-ago quarter on account of an exceptional item.

At the time of writing, Sun Pharma share price was trading up by 2.1%.

In the news from the economy. The industry body, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest Economic Outlook Survey has forecasted that India's gross domestic product (GDP) growth is likely to expand at 7.4% in the current fiscal year (FY19), higher than the previous year.

However, it said that rising oil prices are putting pressure on the current account, while global uncertainties around trade and financial markets carry serious risks for the rupee. Also, trade tensions between major economies are disturbing the global recovery.

The FICCI survey forecasts an annual median GDP growth at 7.4% for 2018-19, with a minimum and maximum range of 7.1% and 7.5%, respectively.

It added that the projection is in line with the estimates put out by the Reserve Bank India (RBI) earlier this month. The expansion in the GDP was 6.7% (provisional) in 2017-18.

On the growth in the first quarter of the current fiscal, it said the expansion in the economic activity would be 7.1%. On rupee front, it said the Indian currency will remain under strain. As per the report, the fair value of Indian Rupee vis-a-vis the US Dollar would be in the range of 65 to 66.

On the sectoral front, the industry body said the median growth forecast for agriculture and allied activities has been put at 3% for 2018-19. Although there has been some slippage in the monsoons during June and July, updated forecast for August and September indicate a pick-up in rainfall.

Besides, industry and services sector are expected to grow by 6.9% and 8.3%, respectively in 2018-19.

Talking about inflation, FICCI said the Consumer Price Index or retail inflation has been forecast at 4.8% for the year as a whole. Further, the median growth forecast for IIP has been put at 6.5% for the year 2018-19.

However, at Equitymaster, we do not attempt to predict how and when macroeconomic developments will unfold. Instead, we focus on the fundamentals and the underlying business strength of companies.