Indian benchmark indices, the BSE Sensex and NSE Nifty50, are expected to open higher on Tuesday, following firm cues from Asian peers, which surged despite the broadly sell-off on Wall Street overnight. The trends on SGX Nifty also indicated a gap-up opening for the Indian equities, with SGX Nifty futures trading 64 points or 0.4% higher at 16,809 on the Singapore Stock Exchange at 8:05 AM.
On Monday, the Indian stock markets closed sharply lower as the rapidly spreading Omicron variant of the coronavirus raised concerns about global economic recovery. The tighter restrictions in Europe raised fear about the prospect of global supply chains disruptions. Extending fall for the second straight session, the BSE Sensex closed 1,189 points, or 2.09%, lower at 55,822, and the NSE Nifty ended at 16,614, down 371 points or 2.18%. In line with the benchmark indices, the broader market also saw a sharp sell-off. The BSE Midcap ended 3.4% lower, while the BSE Smallcap index dropped 3.3%. Tata Steel was the top loser on the BSE Sensex pack, followed by IndusInd Bank, State Bank of India, Bajaj Finance, and HDFC Bank, among others.
Individual stocks that will be in focus on Tuesday include MapmyIndia, Tech Mahindra, RailTel Corporation, Wipro, Rolex Rings, Adani Enterprises, and Escorts.
CE Info Systems (MapmyIndia): The share of the software company will begin its trading on the domestic bourses today. The stock is expected to list at a premium amid an overwhelming response to its initial public offering (IPO). The company, which offers software as a service (SaaS), raised Rs 1,039.6 crore at Rs 1,033 per share in its IPO.
Tech Mahindra: The IT firm said it has collaborated with Telefónica Germany to digitally transform its microwave network with open software-defined networking (SDN).
RailTel Corporation of India: The state-run company has secured a work order worth Rs 68.31 crore from the Defence R&D Organisation for the expansion and enhancement of CIAG network capacity.
Wipro: The IT major has announced the acquisition of Texas-headquartered Edgile to boost its leadership in strategic cybersecurity services.
Rolex Rings: The company has signed a pact with the government of Gujarat for the development of Textile & Apparel Park, IT Park, and Toy Park in Gondal district.
Adani Enterprises: A flagship company of Adani Group has bagged a letter of award from Uttar Pradesh Expressways Industrial Development Authority to implement three major stretches of the greenfield Ganga Expressway.
Escorts: The automobile company has received its shareholders’ approval for the preferential allotment of nearly 94 lakh shares to Japan's Kubota Corporation.
Here are key factors that will impact Indian stock market performance today:
Wall Street slumps on Omicron concerns
Wall Street ended lower in overnight trade on Monday, with the major benchmark indices falling more than 1% as surging Omicron coronavirus cases and a possible setback to President Joe Biden's social spending and climate bill weighed on investors’ sentiments. The Dow Jones Industrial Average dropped 1.23%, while the S&P 500 ended 1.14% lower. The Nasdaq Composite plunged 1.24%.
In a major blow to market's sentiment, Democratic Senator Joe Manchin said on Sunday he would not support Biden's $1.75 trillion domestic investment bill. Following Manchin's comments, Goldman Sachs lowered the quarterly U.S. GDP forecast for 2022.
Asian shares rebound
Shares in the Asia-Pacific region traded mostly higher on Tuesday undermining weak cues from Wall Street which finished lower overnight. The local bourses reversed some of the losses as investors picked up some beaten down stocks at a bargain following the recent slump. However, persistent concerns about the rapid spread of the Omicron variant of the Covid-19 continue to weigh on the market sentiment.
Slapping two sessions losing streak, Japan’s Nikkei 225 emerged as the biggest gainer in the region by rising over 2%. The Japanese market had witnessed sharp selling in last two sessions after Bank of Japan (BOJ) announced its decision to scale back its economic stimulus while maintaining its accommodative stance and extended financial relief for small and midsize firms.
South Korea’s Kospi also gained 0.5%, while China’s Shanghai Composite traded higher by 0.5%. Hang Seng index in Hong Kong surged 0.6%, and the Straits Times Index in Singapore rose 0.8%.
In a similar trend, the Australian benchmark index, ASX 200, also gained 0.4% on Tuesday.
Oil prices rebound
Crude oil prices rebounded on Tuesday as traders assessed the impact of surging Omicron cases and rising inflation. However, investors remained concerned that the spread of the new variant of the Covid-19 would crimp demand for fuel.
West Texas Intermediate Crude oil futures for February were up 1.1% at $69.38 a barrel, while Brent oil futures were at $72.18, up 0.9%.
Gold prices steady
Gold prices held steady today as weakness in global equities prompted investors to shift focus towards safe-haven assets such as gold. Spot gold was down 0.2% at $1,790.45 per ounce.