The BSE Sensex and the NSE Nifty are set to open flat to higher on Monday, following mixed trends across global equities. Shares in the Asia-Pacific region were trading mixed on soft Chinese macro data, while Wall Street closed higher on Friday as strong earnings outlook by Apple and Amazon boosted sentiments. Back home, lackluster trends on SGX Nifty also indicated a flat opening for the domestic bourses, with SGX Nifty futures trading 20 points, or 0.12%, higher at 17,252 levels on the Singapore Stock Exchange at 8:05 AM. This week is going to be action packed as some key macroeconomic data and the Reserve Bank of India (RBI) policy announcement are slated to be released during the week. S&P Global Manufacturing data will be announced on August 1, S&P Global Services PMI on August 3, and RBI bi-monthly monetary policy meeting will be held from August 3-5. Besides, auto and cement companies will release their monthly sales numbers today. Among others, foreign funds movement, trends in rupee and crude markets will also impact trading activity in the equity market.
On Friday, the Indian benchmarks closed higher for the third straight session, led by a surge in buying across metal, consumer durables, and IT stocks. The BSE Sensex added 712 points to settle at 57,570, and the NSE Nifty climbed 228 points to 17,158. Overall, the domestic bourses registered record gains in July, with the 30-share Sensex and the broader Nifty50 rallying 8.58% and 8.73%, respectively, during the month, logging their highest return in 23 years. The market sentiment was boosted by trend reversal by foreign investors, who recently turned bullish on Indian markets, and ease in concerns about U.S. rate hike after the Federal said that it will slow down the pace of rate hikes at some point to assess the impact of higher interest rates on the economy and inflation.
Stocks to watch
HDFC: The house finance major has reported 22% year-on-year (YoY) growth in profit for the quarter ending June 30, 2022, at ₹3,669 crore on spurts in individual disbursements, stable margins and an increase in AUMs. In a separate development, the mortgage lender has said it will acquire its venture capital subsidiary HVCL by buying out State Bank of India's 19.5%stake in the company.
Zee Entertainment: The proposed merger of Zee Entertainment Enterprises (Zee) and Culver Max Entertainment (formerly Sony Pictures Networks India) has been approved by the Bombay Stock Exchange and National Stock Exchange.
Emami: Homegrown FMCG firm has posted 6.55% drop in June quarter profit after tax (PAT) at ₹72.69 crore, compared to ₹77.79 crore in the year-ago period. However, revenue from operations rose 17.75% to ₹778.29 crore during the quarter, as against ₹660.95 crore in the corresponding period last year.
Ashok Leyland: The Hinduja Group company registered a net profit of ₹68 crore in Q1FY23, compared to a loss of ₹282 crore in the year-ago period, driven by strong volume growth. The company also unveiled its plan to invest ₹750 crore in each of the next two years, and is in the final round of talks to raise funds for its electric vehicle arm, Switch Mobility.
Cipla: The pharma major reported a profit of ₹686.4 crore in the first quarter of fiscal 2022-23, down nearly 4% on yearly basis, while its consolidated revenues dropped 2% to ₹5,375 crore. The firm’s revenue from India business declined 8.4% YoY to ₹2,483 crore due to normalisation in the share of Covid-19 drugs in the branded prescription business.
DLF: The realty major has posted a 39% growth in its consolidated net profit to ₹469.56 crore in the quarter ended in June as against ₹337.16 crore in the year-ago period, on the back of strong sales. Total income rose to ₹1,516.28 crore, from ₹1,242.27 crore in Q1FY22.
Dr Reddy's Laboratories: The homegrown pharma major has signed a pact with US-based Slayback Pharma to acquire rights of a medication to relieve redness of the eyes. The agreement also provides Dr Reddy's rights in Brimonidine Tartrate Ophthalmic Solution 0.025%.
YES Bank: The private sector lender will offload 10% stake to U.S. private equity firms Carlyle Group Inc and Advent International for $1.1 billion. The bank will raise the funds through a combination of about $640 million in shares and about $475 million in share warrants.
Bank of Baroda (BoB): The PSU lender has posted a 79.3% YoY rise in its net profit at ₹2,168 crore in the quarter ended June (Q1FY23), driven by fall in provisions for bad loans. The net interest income (NII) grew 12% to ₹8,838 crore in Q1FY23, from ₹7,982 crore in Q1FY22.
Here are the key things investors should know before the market opens today:
Wall Street ends higher on Friday
On Friday, U.S. stocks ended higher as investors cheered upbeat earnings forecasts from Apple and Amazon, while hopes of a less aggressive monetary policy by the Federal Reserve also lifted sentiments. The demand for equities was boosted amid hopes that central banks will have to taper monetary tightening if aggressive rate hikes impact the growth of the world’s largest economy. On the corporate front, Amazon and Apple shares surged after they reported strong earnings which eased fears about a profit slowdown. The Dow Jones Industrial Average rose 1%, the S&P 500 gained 1.4%, and the tech-heavy Nasdaq Composite surged 1.9%.
Asian shares mixed on soft Chinese data
Shares in the Asia-Pacific region were trading mixed in early trade on Monday as weak Chinese economic data dented sentiments, while firm cues from Wall Street limited market losses. China's factory activity contracted in July as Covid-19 pandemic impacted demand. As per the data, the manufacturing purchasing managers' Index (PMI) dropped to 49 in July, lower than forecasts for 50.4.
Markets in mainland China were trading mixed, with the Shanghai Composite falling 0.6% and the Shenzhen Component rising 0.4%.
The Hang Seng index in Hong Kong was the worst performer in the regional market with a 1.1% loss, followed by the Straits Times in Singapore, which fell 0.3%. Among others, Taiwan's Weighted index fell 0.15%.
Regional heavyweight Japan’s Nikkei 225 gained 0.5%, South Korea’s Kospi jumped 0.35%, and Australia’s ASX 200 added 0.3%. The Jakarta Composite in Indonesia also rose 0.6%.
The major companies that will release their June quarter earnings today include ITC, Zomato, UPL, Eveready Industries India, Punjab & Sind Bank, Varun Beverages, Castrol India, and others. Among others, Arvind, Bajaj Consumer Care, Barbeque-Nation Hospitality, Carborundum Universal, Escorts Kubota, Indo Count Industries, Kansai Nerolac Paints, Max Financial Services, Prudent Corporate Advisory Services, The Ramco Cements, RateGain Travel Technologies, Thyrocare Technologies, and Triveni Turbine will also be in focus ahead of their earnings report.
FPIs pump in ₹5,000 crore in July
Snapping nine months of consecutive selling, foreign investors have turned net buyers and invested nearly ₹5,000 crore in Indian equities in July. This is in sharp contrast to net fund outflows of ₹50,145 crore from the stock market in June, which was the highest since March 2020. In the last nine months since October 2021, foreign portfolio investors (FPIs) sold a massive ₹2.46 lakh crore in the Indian equity markets till June 2022.