Indian equity benchmarks, the BSE Sensex and the NSE Nifty, are set to fall in opening deals on Thursday, tracking weak cues from global peers as higher-than-expected U.S. CPI inflation data raised the possibility of aggressive interest rate hikes by the Federal Reserve. The negative trends on SGX Nifty also indicated a bearish opening for the domestic bourses, with SGX Nifty futures trading 162 points, or 1%, lower at 16,005 on the Singapore Stock Exchange at 8:20 AM. Investors will also keep an eye on corporate earnings as some major companies such as L&T, Tata Motors, RBL Bank, Siemens, Apollo Tyres will release their March quarter earnings. The retail inflation data for April will also be released post-market hours today.
On Wednesday, the domestic bourses extended loss for the fourth consecutive session and slipped to their 2-month low, following weak cues from global peers and sustained fund outflows by foreign portfolio investors (FPIs). The U.S. Federal Reserve’s hawkish policy stance and decision to reduce balance sheets soured investors’ appetite for riskier assets. Adding to it, the concerns about global economic growth in wake of the strict lockdowns in China as well as the ongoing Russia-Ukraine war also triggered a sell-off in global equities. The Sensex closed 276 points, or 0.51%, lower at 54,088, and the NSE Nifty settled at 16,167, down 73 points, or 0.45%. This was their lowest closing level since March 8.
Shares to focus
Canara Bank: The state-owned lender plans to invest about ₹1,000 crore over the next three years for developing a digital banking ecosystem including a super app.
Ultratech Cement: The country’s largest cement company has submitted a non-binding bid on Wednesday to acquire the Holcim stake in Ambuja Cements and its subsidiary, ACC. Swiss multinational Holcim plans to exit India by selling its 63.19% stake in Ambuja Cements.
Birla Corporation: The flagship firm of the M P Birla group reported a 55.45% fall in net profit to ₹111.08 crore in the March quarter due to a one-off credit adjustment of ₹124.98 crore in income tax expense in the previous year. The company’s net profit stood at ₹249.33 crore in the same period last year.
Punjab National Bank (PNB): The net profit of the PSU lender dived 66% YoY to ₹201 crore in January-March quarter of 2022 as the lender sets aside ₹325 crore on account of fraud. For FY22, the net profit stood at ₹3,457 crore as against a profit of ₹2,022 crore in the year ago period.
Relaxo Footwears: The footwear company has reported a drop of 38.40% in its net profit at ₹62.93 crore for the fourth quarter ended March 2022, as against ₹102.17 crore in the same quarter of the preceding fiscal. The revenue from operations fell6.6% to ₹698.19 crore during the period under review as against ₹747.68 crore in the same period of the previous fiscal.
Indiabulls Housing Finance: The company is under the F&O ban today as the stock has crossed 95% of the market-wide position limit.
Here are the key things investors should know before the market opens today:
Wall Street falls on higher inflation data
In the overnight trade, the U.S. indices ended sharply lower, led by growth-driven technology stock as surging inflation boosted the case for higher interest rate hike by the Federal Reserve. The Labor Department's monthly consumer price index (CPI) data showed that inflation rose by 0.3% to 8.3% YoY in April despite a significant drop in crude oil prices. The rise in inflation was much lower than the 1.2% surge reported in March, but it still surpassed the market expectations. The S&P 500 ended 1.64% lower and the Dow Jones Industrial Average fell 1.01%. The tech-heavy Nasdaq Composite plummeted 3.18%.
Asian stocks follow Wall Street lower
Shares in the Asia-Pacific region were flashing red in opening deals on Thursday, following negative closing on Wall Street overnight as investors weighed higher-than-expected U.S. CPI inflation data which raised the possibility of aggressive interest rate hikes.
Regional heavyweight Japan’s Nikkei 225 was down 0.8%, the Hang Seng index in Hong Kong fell 0.6%, and South Korea’s KOSPI dropped 0.15%.
Similarly, the Straits Times Index in Singapore fell 0.8%, Australia’s ASX 200 tumbled 1%, and Indonesia’s Jakarta Composite also declined 1.1%. Among others, Taiwan’s Weighted index slipped 0.7%.
In mainland China, shares were trading on a mixed note with the Shenzhen Component falling 0.1% while the Shanghai Composite rising 0.3% in early trade.
Oil prices retreat after overnight rally
The price of Brent and U.S. crude was down over 1% in early trade on Thursday after surging nearly 5% in overnight trade. The fuel price soared overnight after WHO said China's lockdown to contain Covid-19 virus was “unsustainable”. The escalated conflict between the Russian and European Union also pushed prices higher after Moscow sanctioned some European gas companies, raising concerns about tighter supply.
In Asian trading hours on Thursday, the Brent oil for July delivery was down 1.2% at $106.5 per barrel, while the U.S. West Texas Intermediate (WTI) crude June futures fell 1.2% to $104.4 a barrel.
FIIs remain net sellers, DIIs net buyers
The foreign institutional investors (FIIs) continued to remain net sellers in the Indian equity market on May 11, while domestic institutional investors (DIIs) continued to support the market. As per the exchange data, FIIs net sold shares worth ₹3,609.35 crore, while DIIs net purchased shares worth ₹4,181.20 crore.
The companies that are slated to release their earnings numbers today include Larsen & Toubro, Tata Motors, Aditya Birla Capital, Apollo Tyres, Anupam Rasayan India, Avanti Feeds, Brigade Enterprises, Coforge, CreditAccess Grameen, Greaves Cotton, Gujarat State Petronet, Genus Power Infrastructures, Honeywell Automation India, HP Adhesives, ICRA, Jammu & Kashmir Bank, JMC Projects, Lumax Auto Technologies, Matrimony.com, Mindspace Business Parks REIT, RBL Bank, Siemens, South Indian Bank, Spencers Retail, Poonawalla Fincorp, Ujjivan Small Finance Bank, Windlas Biotech, will release quarterly earnings on May 12.