Sell-off to continue at Sensex, Nifty; Vodafone Idea, YES Bank, HDFC Life, Delhivery shares eyed

The domestic benchmarks, the BSE Sensex and the NSE Nifty, are poised to open lower on Monday, following a sell-off in Asian markets as investors remained worried that aggressive monetary policy by inflation-fighting central banks could push the global economy into recession. The negative trends on SGX Nifty also indicated a gap-down opening for the domestic bourses, with SGX Nifty futures trading 82 points, or 0.54%, lower at 15,233 on the Singapore Stock Exchange at 8:10 AM.

Last week, the domestic bourses witnessed sharp selling, with benchmark indices extending losses for the sixth straight session on Friday, weighed down by rate hikes by central banks across the world, sustained foreign fund outflows, and rising crude oil prices. The sell-off was triggered in the market amid concerns that the global economy would slip into recession as central banks hike rates to counter rising inflation. The 30-share index Sensex plummeted 2,943 points, or 5.42%, to 51,360 during the week ended June 17. In a similar trend, the 50-share Nifty index tumbled 908 points, or 5.61%, to 15,293. On Friday, the BSE benchmark ended 135 points lower at 51,360 levels, while the Nifty settled 67 points lower at 15,278, with both indices hitting their 52-week lows. The top laggards include Asian Paints, Wipro, Dr. Reddy's, Titan, TCS, Tech Mahindra, Sun Pharma, and Maruti Suzuki.

Stocks to watch

Adani Wilmar: The FMCG major in a release on June 18 said that it has cut the maximum retail price (MRP) of its Fortune range of edible oils in line with cooling rates in global markets. It has reduced the MRP of Fortune refined Sunflower oil’s 1-litre pack from ₹220 to ₹210 and the MRP of Fortune Soyabean and Fortune Kachi Ghani (mustard oil) 1-litre pack from ₹205 to ₹195.

Vodafone Idea: The telecom major’s board is set to meet on June 22 to consider a proposal to raise up to ₹500 crore by way of issue of equity shares or convertible warrants on preferential basis to one or more entities of Vodafone Group.

Alkem Laboratories: The drug maker has received three observations for its U.S. unit after the American drug regulator inspected the company's manufacturing facility at St Louis from June 6 to June 17, 2022.

YES Bank: The debt-laden private bank’s plan to sell bad loans worth ₹12,000 crore to Asset reconstruction companies (ARC) faces a hurdle as the central bank directs the lender to avoid any conflict of interest with the ARC.

Aurobindo Pharma: The pharma major has acquired a 51% stake in Hyderabad-based GLS Pharma, which operates in the oncology business, for ₹28.05 crore.

ICICI Bank, Axis Bank: Global rating agency Moody’s has upgraded ICICI Bank and Axis Bank’s baseline credit assessments (BCA) to “baa3”, citing improvements in credit fundamentals such as asset quality, capital, and profitability.

HDFC Life Insurance Company: The insurer has unveiled plans to raise debt capital of up to ₹350 crore by issuing bonds on a private placement basis.

Delhivery: The recently listed logistics firm has launched its guaranteed same-day delivery (SDD) service in 15 Indian cities, a move which is seen as a strategy to help brands in winning customer loyalty.

Nazara Technologies: The company has announced the record date for the planned bonus issue of shares. It has fixed June 27 as the record date for the bonus issue, which will be offered to eligible shareholders in the proportion of 1 new fully paid up equity shares of ₹4 each for every 1 fully paid up existing equity share of ₹4 each held.

Dilip Buildcon: The realty firm’s joint venture company RBL-DBL has emerged as top bidder for the Surat Metro Rail Project in Gujarat. The order is worth ₹1,061 crore.

Vadilal Industries: The company, via its subsidiary Vadilal Industries USA Inc, has acquired ice-cream parlour operator Krishna Krupa Corporation, USA (KKC) through a stock purchase agreement.

Indian Hume Pipe Company: The firm has bagged a work order of ₹110 crore from the Public Health Engineering Department (PHED), Rajasthan, for a cluster water supply project under Jal Jeevan Mission (JJM) with operation and maintenance for 10 years.

Engineers India: The company has won secure separate projects worth ₹80 crore from specialised chemicals, sunrise, and infrastructure sectors.

Here are the key things investors should know before the market opens today:

Wall Street posts biggest weekly loss since 2020

On Friday, the U.S. indices closed mixed amid concerns that rising inflation, the ongoing Russia-Ukraine war, and lockdowns in China may derail the global economic recovery. The Dow Jones Industrial Average fell 0.13%, while the S&P 500 rose 0.22% and the tech-heavy Nasdaq Composite jumped 1.43%. For the week ended June 17, the S&P 500 nosedived 5.8%, registering its worst fall since the third week of 2020. The U.S major indices saw sharp selling last week after the Federal Reserve on Wednesday raised the official interest rate by 0.75 percentage points, the sharpest rise in nearly 30 years.

Asian stocks flash red

Shares in the Asia-Pacific region opened mostly lower on Monday as traders were concerned that aggressive monetary policy tightening by central banks could push the global economy into recession. The U.S. central bank last week raised the rate by 0.75%, the highest since 1994, followed by similar moves by few European countries as well as the United Kingdom, which hammered global equities.

South Korea’s KOSPI was the worst performer in the region with a 2% loss, followed by regional heavyweight Japan’s Nikkei 225, which slumped 1.3%. The Hang Seng index in Hong Kong and Taiwan’s Weighted index dropped nearly 1%, while Australia’s ASX 200 fell 0.8%.

Similarly, Indonesia’s Jakarta Composite fell 0.2% and the Straits Times Index in Singapore shed 0.3%.

In mainland China, stocks were trading mixed, with Shenzhen Component rising 0.9%, while the Shanghai Composite fell 0.6%.

Oil prices edge lower

The Brent and U.S. crude futures were trading a tad lower in early trade on Monday as investors remained jittery amid growing fear that the central banks' policy stance to curb inflation may push the global economy into recession. The restrictive measures in China in the wake of fresh Covid-19 cases and looming fear about global economic growth raised concerns about the demand outlook.

In Asian trading hours, the Brent oil for July delivery was down 0.22% to $112.9 per barrel, while the U.S. West Texas Intermediate (WTI) crude July futures fell 0.2% to $117.8 a barrel.

FPIs offload equities worth ₹31,430 cr in June so far

Foreign investors continued their selling spree in the Indian equity market amid concerns about an aggressive rate hike by the U.S. Federal Reserve as well as elevated inflation. Foreign Portfolio Investors (FPIs) have pulled out ₹31,430 crore from the Indian stock market in June so far, with net outflow touching nearly ₹2 lakh crore so far in 2022, data with depositories showed. This trend is likely to continue in the near future as inflation is expected to remain at elevated levels, above RBI's threshold limit which may prompt the central bank to further hike interest rates.

FIIs, DIIs data

The foreign institutional investors (FIIs) remained net sellers in the Indian equity market on June 17, while domestic institutional investors (DIIs) continued to support the market. As per the exchange data, FIIs net sold shares worth ₹7,818.61 crore, while DIIs net purchased shares worth ₹6,086.92 crore.