The domestic benchmarks, the BSE Sensex and the NSE Nifty, are set to open flat to lower on Wednesday as shares in Asia and Wall Street fall ahead of the U.S. Federal Reserve policy decision later tonight. The cut in gross domestic product (GDP) growth forecast for India as well as the global economy by the International Monetary Fund (IMF) will also weigh on investors’ sentiments. The flat trends on SGX Nifty also indicated a muted opening for the domestic bourses, with SGX Nifty futures trading 3 points, or 0.02%, lower at 16,473 levels on the Singapore Stock Exchange at 8:05 AM. Investors will keep an eye on corporate results, foreign fund movement, trends in the rupee, and crude oil, which will set directions for the market. Among individual stocks, Tata Motors, Maruti Suzuki India, Bajaj Finance, Biocon, United Breweries, and Colgate-Palmolive will be in focus ahead of their quarterly earnings report.

On Tuesday, the Indian share market fell nearly 1% to end lower for the second straight session amid profit booking in the IT, banking, and FMCG space. The caution prevailed in the market ahead of the policy decision by the U.S. Federal Reserve, which is expected to raise the interest rate by at least 75 basis points. The BSE benchmark Sensex closed 498 points, or 0.89%, lower at 55,268, with 22 of its constituents ending in the red. Similarly, the broader NSE Nifty tumbled 147 points, or 0.88%, to 16,484. IT major Infosys was the worst performer in the Sensex pack, while rivals Wipro, HCL Tech, Tech Mahindra, and TCS were also among the top laggards. Among others, Axis Bank, Kotak Bank, HUL, Dr. Reddy’s, L&T, Titan, Nestle, Tata Steel, Maruti, and Sun Pharma also settled in negative terrain.

Stocks to watch

Larsen & Toubro (L&T): The engineering major has posted a consolidated net profit of ₹1,702 crore, registering a robust growth of 45% over the corresponding quarter of the previous year. The construction giant reported revenues of ₹35,853 crore for the quarter ended June 30, 2022, up 22% on yearly basis.

Axis Bank: The Competition Commission of India (CCI) on Tuesday approved the proposed acquisition of Citibank’s consumer banking business by Axis Bank. The ₹12,325 crore deal, which was announced on March 30, comprises the sale of the consumer banking businesses of Citibank India, which includes credit cards, retail banking, wealth management, and consumer loans.

Tata Power Company: The Tata group company posted a 90% YoY growth in consolidated PAT before exceptional items at Rs 884 crore for the quarter ended June 2022, against ₹466 crore in Q1FY22, driven by broad-based improvement across all verticals. Consolidated revenue jumped 48% to ₹14,776 crore during the same period last year.

Wipro: The IT heavyweight said that Nokia has extended strategic partnership to drive digital transformation and efficiencies in global business services. The IT services provider has inked a new five-year strategic pact with Nokia.

Zydus Lifesciences: The drug maker has received final approval from the United States Food and Drug Administration (USFDA) to market Bisoprolol Fumarate tablets, used to treat high blood pressure.

United Spirits: The company has reported more than five-fold year-on-year growth in consolidated profit at ₹261.10 crore for the quarter ended June 2022, supported by strong operating performance and top line growth. Revenue climbed 15.6% YoY to ₹7,131.3 crore during the quarter under review.

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

Wall Street ends lower

In the overnight trade, U.S. stocks ended in negative terrain as investors turned jittery about rate hikes by the Federal Reserve and recession concerns. The market sentiment was further dented after the International Monetary Fund (IMF) lowered its global growth forecast, citing "gloomy and uncertain" global economic environment amid rate hikes and inflation. The Dow Jones Industrial Average shed 0.7%, the S&P 500 index fell 1.2%, and the tech-heavy Nasdaq Composite ended almost 2% lower.

Asian stocks mostly lower

Shares in the Asia-Pacific region were trading mostly lower on Wednesday, barring Japan, tracking a negative finish on Wall Street overnight. Investors weighed U.S. retailer Walmart’s profit warning ahead of another round of U.S. interest rate hike by the Federal Reserve in its policy announcement today.

Regional heavyweight Japan’s Nikkei 225 extended gain for the second day and rose 0.2% in early trade, followed by Jakarta Composite in Indonesia, which gained 0.35%.

South Korea’s Kospi fell 0.5%, and the Straits Times in Singapore traded tumbled 0.2%, and Australia’s ASX 200 traded marginally lower.

The Hang Seng index in Hong Kong was the biggest laggard in the regional market with a 1.2% loss, while Taiwan Weighted index fell 0.3%.

Markets in mainland China were also under stress, with the Shanghai Composite and the Shenzhen Component falling by 0.2% and 0.1%, respectively.

Oil prices steady

The price of Brent and U.S. crude were steady around $100 mark in early trade on Wednesday as investors remained worried about demand outlook amid looming rate hike by the U.S. central bank and slowdown in global economy. However, supply concerns propelled prices higher after Russian energy major Gazprom announced to cut gas supplies to Europe.

In Asian trading hours on Wednesday, the Brent oil for September delivery was flat at $99.4 per barrel, while the U.S. West Texas Intermediate (WTI) crude August futures were up 0.23% at $95.2 a barrel.

FIIs remains net sellers, DIIs turn net buyers

The foreign institutional investors (FIIs) extended their selling spree in the Indian equity market on July 26, while domestic institutional investors (DIIs) continued to support the market. As per the exchange data, FIIs net sold shares worth ₹1,548.29 crore, while DIIs net purchased shares worth ₹999.36 crore.

IMF cuts GDP forecast for FY23

The International Monetary Fund (IMF) on Tuesday lowered India's growth rate by 0.8% to 7.4% for the current financial year 2022, citing unfavourable external conditions and more rapid policy tightening. India’s GDP growth is expected to further slow down to 6.1% in fiscal year 2023. However, India’s 7.4% growth for FY22 is the second highest growth projection after Saudi Arabia’s 7.6%.

The IMF, in its World Economic Outlook update of July 2022, pegs the global economy to slow further to 3.2% in 2022 from last year’s 6.1%, saying that the global economy is facing an increasingly gloomy and uncertain outlook due to a hawkish policy stance by central banks globally and Russia’s invasion of Ukraine

Corporate results

The major companies that will be in focus ahead of June quarter earnings on July 27include Tata Motors, Maruti Suzuki India, Bajaj Finance, Biocon, United Breweries, and Colgate-Palmolive. Among others, Aarti Drugs, CG Power and Industrial Solutions, Clean Science and Technology, Coromandel International, Dixon Technologies, EIH, Fino Payments Bank, Home First Finance Company India, JK Lakshmi Cement, Latent View Analytics, Laurus Labs, Novartis India, Poonawalla Fincorp, Schaeffler India, TeamLease Services, VIP Industries, and Welspun India will also release their quarterly results today.

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