Indian equity benchmarks are set to start the week on a negative note, mirroring weakness in Asian peers amid the tensions in Ukraine. The bearish trends on SGX Nifty also indicated a gap-down opening for the domestic bourses, with SGX Nifty futures trading 106 points, or 0.61%, lower at 17,174 on the Singapore Stock Exchange at 8:00 AM.
"There are strong headwinds for the market arising from Ukraine tensions and monetary tightening by the Fed expected from March onwards. Adding to these headwinds there are concerns specific to India like sustained FII selling and rising crude. Brent crude at around $ 94 a barrel can aggravate inflation in India and depreciating rupee may further prompt FIIs to sell. Retail investor optimism and cash-rich DIIs are positives, " says Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"Trends of improving earnings growth and fair valuations in segments like financials are supporting the market. Investors may wait till clarity emerges on the Ukraine front. March is likely to be an event filled month with state election results, Fed meet and LIC IPO," he added.
On Friday, the Indian equity market ended lower for the third consecutive session as it struggled for a firm direction in absence of any major development on the domestic or global front. Adding to it, mixed cues from global peers also weighed on the market as persistent concerns about Ukraine-Russia tensions and fear of aggressive policy stance by the U.S. Federal Reserve triggered a sell-off in global equities. The BSE Sensex closed 59 points, or 0.1%, lower at 57,833, and the NSE Nifty shed 23 points, or 1.16%, to 17,276. On the sectoral front, all indices closed in negative terrain, except capital goods and banks. The top five losers on the BSE Sensex pack were UltraTech Cement, Mahindra & Mahindra, Infosys, Reliance Industries, and Bajaj Finance.
Stocks to watch
InterGlobe Aviation: The airline’s co-founder Rakesh Gangwal has resigned as non-executive, non-independent director of the company with immediate effect. Rakesh Gangwal will offload his stake in the company over five year period.
Infosys: The IT major has been signed up for Guidewire PartnerConnect program at the select level for the Americas region. As a member of Guidewire, it will provide consulting services such as business transformation and strategy, implementation and associated solution and delivery services.
Federal Bank: The private lender’s arm Fedbank Financial Services has filed draft papers with market regulator Sebi to raise funds via an initial public offering. The issue comprises of a fresh issue of ₹900 crore and an offer for sale (OFS) of up to 45.71 million shares by its existing shareholders and promoters.
Power Finance Corporation: LIC of India has offloaded 2.02% stake in the company through open market transactions. Following this sale, LIC's stake in the company dropped to 5.06%.
Phoenix Mills: The company has inked a non‐binding term sheet to acquire 50% equity stake in Classic Mall Development Company Limited (CMDCL) from Crest Ventures Ltd (CVL) and Escort Developers Private Ltd for ₹918 crore.
Equitas Small Finance Bank: The private sector lender has garnered ₹550 crore from the government of Singapore, Singapore's central bank and few local mutual funds. The share was issued at ₹53.95 a share, down 5% to the floor price of ₹56.40 a share.
Johnson Pharmacare: The healthcare company’s board has approved 1:10 bonus shares, subject to shareholders’ approval. It company will announce record date later.
Hazoor Multi Projects: The company has bagged an order worth ₹6.54 crore from Varaha Infra for completion of the project at the National Highway 548-A from the section Waken Pali to two-lane with paved shoulder.
Stocks under F&O ban: As many as three stocks - Escorts, Indiabulls Housing Finance, and Punjab National Bank – will be under the F&O ban today. The ban is imposed on companies in which the security breaches 95% of the market-wide position limit.
Here are the key things investors should know before the market opens today:
Wall Street closed lower on Ukraine woes
Wall Street logged weekly losses for the second straight week, as fear of hawkish policy stance from the Federal Reserve and escalating geo-political tensions between Russia and Ukraine continued to drag market lower.
On Friday, all three major U.S. indices closed lower, with the tech-heavy Nasdaq Composite ending 1.2% lower, led by high-growth stocks such as Apple, Amazon and Microsoft. The Dow Jones Industrial Average fell 0.68%, the S&P 500 shed 0.72%.
The U.S. markets will be closed for a public holiday on Monday.
Asian stocks fall in early deals
Shares in the Asia-Pacific region started the week on a bearish note, with most of the regional markets trading in red. The market sentiment was dented by political tensions between Russia and Ukraine, while fear of aggressive rate hike by the U.S. central bank also injected negativity in the market. The weak cues from U.S. and European markets also weighed on market sentiment.
The Japanese stock market opened lower, with the benchmark Nikkei 225 falling 0.7% in early trade. South Korea’s KOSPI shed 0.4%, while the Hang Seng index in Hong Kong fell 0.6%. The Straits Times Index in Singapore also edged lower.
In mainland China, the Shenzhen component and the Shanghai composite dropped 0.3% and 0.4%, respectively, in early deals.
FIIs remain net sellers, DIIs net buyers
Foreign institutional investors (FIIs) remained net sellers in the Indian equity market on February 18, while domestic institutional investors (DIIs) turned net buyers. As per the data available on the NSE, FIIs sold shares worth ₹2,529.96 crore, while DIIs net purchased shares worth ₹1,929.08 crore.
Brent crude rebounds over Ukraine-Russia tensions
Global benchmark Brent crude were trading near $95 a barrel in early trade on Monday as fear of an invasion of Ukraine by Russia, one of the major oil producers, rattled investors’ sentiments. Investors feared that rising geo-political tensions may lead to further supply disruptions in an already-tight market. The US and European Union have warned that they would impose sanctions on Russia if it invaded its neighbouring country.
During the early Asian trading hours on Monday, the U.S. West Texas Intermediate (WTI) crude futures rose 1.8% to $92.75 a barrel, while the Brent oil futures surged 1.4% to $94.90 per barrel.