Indian equity benchmarks, the BSE Sensex and the NSE Nifty, are set to extend their losses on Tuesday, following weak cues from global peers, as concerns about rate hikes triggering a global economic slowdown. The Asian stocks dived to their lowest in nearly two years, while major U.S. shares closed at record low as investors expect more tightening as policymakers turn hawkish to combat rising inflation. The negative trends on SGX Nifty also indicated a bearish opening for the domestic bourses, with SGX Nifty futures trading 74 points, or 0.46%, lower at 16,217 on the Singapore Stock Exchange at 8:15 AM.
On Monday, the domestic bourses ended lower for the second straight session, weighed down by selling in index heavyweights such as Reliance Industries, IndusInd Bank, Nestle India, Tata Steel, Tech Mahindra, SBI, HUL, and ITC. The BSE Sensex declined 365 points or 0.67% to close at 54,471, and the NSE Nifty tumbled 109 points or 0.67% to 16,302. In line with the broader market, the BSE smallcap and the midcap index dipped 1.67% and 1.89%, respectively. Among sectors, most sectors ended lower, while power, utilities, energy, oil and gas, and metal indices fell the most.
Shares to focus
Reliance Industries: A part of the company’s retail arm, Reliance Brands has signed a deal to retail Italian luxury brand Tod’s all categories including footwear, handbags, and accessories in the Indian market.
PVR: The country’s leading multiplex chain operator saw its consolidated net loss narrowing to ₹105.49 crore during the fourth quarter ended in March 2022. Its revenue from operations rose by nearly three-fold YoY to ₹537.14 crore in Q4 FY22.
HCL Technologies (HCL): IT major on Monday said it will acquire Bengaluru-based Quest Informatics (Quest), an aftermarket digital company, in an all-cash deal worth ₹15 crore.
Shipping Corporation of India: The state-owned shipping company on Monday said its board has approved certain modifications in the scheme of arrangement for demerger of the company's non-core assets into Shipping Corporation of India Land and Assets Ltd.
IDBI Bank: The PSU lender’s board has approved the appointment of T N Manoharan as the part-time chairman for a period of three years. Besides, M R Kumar has stepped down as the non-executive non-whole time chairman of the bank with effect from May 8, 2022.
NTPC: The state-run power company has invited bids to procure imported 4.53 million tonnes (MT) coal mainly for blending with the domestic dry fuel in thermal plants.
Inox Wind: The company’s arm Inox Green Energy Services' board on Monday gave nod to a proposal to raise ₹900 crore through an initial public offer (IPO).
UPL: Agro-chemicals firm has reported a 29% growth in net profit at ₹1,379 crore for the quarter ended March 2022, as against ₹1,065 crore in the corresponding quarter of the previous financial year. Revenue rose 24% to ₹15,860 crore, compared to ₹12,797 crore in the year-ago period.
GMR Infra: In a major boost to GMR group, the company has won the right to run Nagpur Airport after the Supreme Court upheld Bombay High Court decision’s refusing to annul the bidding process of the Nagpur airport.
Godrej Agrovet: The company has reported a 120.6% rise in its consolidated profit at ₹139.81 crore during the quarter ended March 2022, as against ₹63.38 crore during the corresponding period of the previous fiscal. Revenue from operations jumped 42.62% to ₹2,075.62 crore compared to ₹1,455.25 crore in the same period of the previous fiscal.
Adani Ports and Special Economic Zone Ltd (APSEZ): The Adani group firm on Monday moved the Bombay High Court challenging the disqualification of its bid in connection with a tender issued by state-run Jawaharlal Nehru Port Authority (JNPA).
Central Bank of India: The public sector lender has posted a net profit of ₹310 crore in the fourth quarter ended March 2022, driven by higher net interest income and fall in provisions. The bank, which is under the RBI’s prompt corrective action since June 2017, had posted a net loss of ₹1,349 crore in the quarter ended March 2021.
Here are the key things investors should know before the market opens today:
Rupee hits all-time low
The Indian rupee hit its lifetime low of 77.58 against the U.S. dollar on Monday amid continued foreign fund outflows amid hawkish policy stance by central banks across the globe. The domestic currency finally ended the day at 77.50, down 60 paise, breaching its previous closing low of 76.98 on March 7. The key factor that dragged the rupee lower includes strong U.S. dollar, persistent rise in treasury yields, and strong sell-off by foreign investors.
Wall Street sell-off continue
In the overnight trade, all three major U.S. indices ended sharply lower, extending previous week losses, amid growing concerns about rising interest rates. On Monday, the S&P 500 dropped 3.20% to end below 4,000 levels for the first time since March 31, 2021. The tech-heavy Nasdaq Composite plunged 4%, and the Dow Jones Industrial Average plunged 2%.
There is speculation in the market that the Federal Reserve will hike rates by 75 basis points in the next policy meeting to tame inflation, even after chairman Jerome Powell last week downplayed any significant movement in rates in near-term future. The higher interest rates raises the fear of a recession, given that the economy is already battling with high inflation, surge in commodity prices amid the Russia-Ukraine crisis, and Covid-related supply chain disruptions.
Asian stocks follow Wall Street lower
Shares in the Asia-Pacific region were reeling under selling pressure in opening deals on Tuesday, following a negative finish on Wall Street overnight as investors weighed the impact of higher interest rates on global economic growth. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8%, extending the loss for a seventh straight session.
Regional heavyweight Japan’s Nikkei 225 fall 1%, South Korea’s KOSPI shed 1.3%, and the Straits Times Index in Singapore dropped 1.4%.
In a similar trend, the Hang Seng index in Hong Kong plunged 2.5%, Australia’s ASX 200 dropped 1.3%.
Indonesia’s Jakarta Composite was the worst performer in the regional market with a 2.6% loss, while Taiwan’s Weighted index fell 0.3%.
In mainland China, shares were trading mixed, with the Shenzhen Component gaining 1% and the Shanghai Composite falling 0.1%.
Oil prices fall as pandemic hit demand
The price of Brent and U.S. crude fell over 1% in early trade on Tuesday as coronavirus-led lockdowns in China, the top oil importer, hit demand outlook. Adding to it, growing concerns about global economic growth in the wake of higher interest rates also spooked investors’ sentiments. In Asian trading hours on Tuesday, the Brent oil for July delivery was down 1.6% at $104.25 per barrel, while the U.S. West Texas Intermediate (WTI) crude June futures fell 1.6% to $101.4 a barrel.
FIIs turn net sellers, DIIs remain net buyers
The foreign institutional investors (FIIs) remained net sellers in the Indian equity market on May 9, while domestic institutional investors (DIIs) continued to support the market. As per the exchange data, FIIs net sold shares worth ₹3,361.80 crore, while DIIs net purchased shares worth ₹3,077.24 crore.
The major companies that are slated to release their earnings numbers today include Asian Paints, Ajanta Pharma, Cipla, Cera Sanitaryware, Chalet Hotels, Chemplast Sanmar, Dishman Carbogen Amcis, Elantas Beck India, Electrosteel Castings, Gujarat Gas, Kansai Nerolac Paints, Max Financial Services, Mahanagar Gas, MRF, Polycab India, Neuland Laboratories, Orient Electric, Reliance Capital, R Systems International, Shemaroo Entertainment, Tajgvk Hotels & Resorts, TD Power Systems, Torrent Power, Venky's (India), Vodafone Idea, and Welspun India.