Indian benchmark indices, the BSE Sensex and the NSE Nifty, are set to open higher on Wednesday, undermining weak cues from global equities as investors brace for a flurry of rate hikes in the coming week. The positive trends on SGX Nifty indicated a gap-up opening for the domestic bourses, with SGX Nifty futures trading 87 points, or 0.5%, higher at 17,071 on the Singapore Stock Exchange at 8:00 AM. All eyes will be on the highly anticipated LIC IPO, which will open for subscription today. Investors will also keep a close eye on corporate earnings reports with some major companies such as Kotak Mahindra Bank, Adani Green Energy, Adani Total Gas, Havells India set to release their March quarter results today.
On Monday, the domestic bourses closed lower for the second straight session, tracking weakness in global equities as investor sentiment remained fragile amid worries that continued rise in inflation will lead to rapid rate hikes across the globe. The 30-share BSE Sensex settled 85 points, or 0.15%, lower at 56,976 after pairing some early losses, while NSE Nifty declined 33 points, or 0.20%, to close at 17,069. The top laggards on the Sensex pack were Titan, Wipro, Tech Mahindra, Infosys, Maruti, Asian Paints, Larsen & Toubro and SBI, while IndusInd Bank, NTPC, Power Grid, Tata Steel, HDFC and ITC were among notable gainers. The markets were closed on Tuesday on the eve of Eid-ul-Fitr.
Stocks to focus:
Tata Steel: The steel major has reported a 46.8% year-on-year (YoY) jump in consolidated net profit at ₹9,756 crore for the fourth quarter ended March 2022. Total revenues rose 38.6% to ₹69,324 crore as compared to ₹50,028 crore in the year-ago period. The board approved a dividend of Rs 51 per fully paid equity share and Rs 12.75 per partly paid equity shares. It also recommended a 10:1 stock split.
Hero MotoCorp: The two-wheeler major has registered a 30% YoY decline in consolidated profit after tax (PAT) to ₹621 crore for the fourth quarter ended March 2022 on account of lower sales. Revenue from operations dropped to ₹7,497 crore as against ₹8,690 crore in the fourth quarter of FY21.
Adani Wilmar: The Adani group company on Tuesday announced the acquisition of several brands including the renowned Kohinoor Brand – domestic (India region) from McCormick Switzerland GMBH for an undisclosed amount.
IIFL Finance: The NBFC major has announced a joint venture (JV) with Open Financial Technologies, Asia’s largest SME focused neo-banking platform, to launch India’s first neobank. The JV will facilitate banking and credit requirements of micro and small enterprises (MSMEs).
JSW Energy: The company has posted an over eight-fold surge in consolidated net profit at ₹372 crore for March quarter of 2022 (Q4) on one-time gains including a reversal of a provision due to a tariff true-up order of its Karcham Wangtoo power plant, located in Himachal Pradesh.
Adani Transmission: Billionaire Gautam Adani-led Adani group company has received shareholders' nod for issuance of 1.56 crore shares worth around ₹3,850 crore on a preferential basis to Green Transmission Investment Holding RSC Ltd.
Adani Enterprises: The flagship company of Adani group has posted a consolidated net profit of Rs ₹304.32 crore for the quarter ended March 31, 2022, as compared to ₹233.95 crore in the year ago period, registering a YoY growth of 30%. The consolidated revenue grew by 83.66% YoY to ₹25,141.56 crore in Q4FY22.
Here are the key things investors should know before the market opens today:
Wall Street gains ahead of Fed meet
On Tuesday, all three major U.S. indices ended higher after a choppy session as the Federal Reserve began a two-day meeting to take a call on monetary policy. Markets fully expect the central bank to announce a 0.5% rate hike in wake of record surge in inflation. The Fed is also expected to begin unwinding $4.5 trillion in asset purchases made during the coronavirus pandemic. In a volatile session, the Dow Jones Industrial Average ended 0.2% higher, the S&P 500 rose 0.5%. In a similar trend, the tech-heavy Nasdaq Composite added 0.2%.
Asian stocks fall on rate hike fears
Shares in the Asia-Pacific region traded mostly lower in early trade on Wednesday as investors brace for central bank monetary policy tightening to combat higher inflation. While the U.S. Federal Reserve is expected to raise the rate by 50 basis points (bps) in its policy meeting tonight, the Reserve Bank of Australia has already hiked the cash rate by 25 bps to 0.35% on Tuesday. Adding to it, concerns about the Covid-19 situation in China also injected negativity in the market.
Regional heavyweight Japan’s Nikkei 225 was down 0.1% in early deals, while South Korea’s KOSPI traded flat ahead of the U.S. Fed policy decision.
The Hang Seng index in Hong Kong fell 0.7%, Singapore’s Straits Times slipped 0.15%, and Australia’s ASX traded marginally lower.
Bucking the trend, Taiwan’s Weighted index climbed 0.5%.
Meanwhile, most markets in China, Thailand and Indonesia were closed for public holiday today.
Oil prices up 1% on supply concerns
The international crude oil prices rebounded in early trade on Wednesday after industry data showed a decline in U.S. inventory, raising supply concerns. Investors also remained concerned ahead of the crucial OPEC+ meeting scheduled on Thursday, led by Saudi Arabia. The meeting comes as the European Union mulls imposing sanctions on Russian oil imports, in line with the United States, Canada, and the United Kingdom.
In Asian trading hours on Wednesday, the Brent oil for July delivery climbed 0.85% to $105.85 per barrel, while the U.S. West Texas Intermediate (WTI) crude futures rose 1.02% to $103.44 a barrel.
FIIs remain net sellers, DIIs net buyers
The foreign institutional investors (FIIs) remained net sellers in the Indian equity market on May 2, while domestic institutional investors (DIIs) continued to support the market. As per the exchange data, FIIs sold shares worth ₹1,853.46 crore, while DIIs net purchased shares worth ₹1,951.10 crore.
LIC IPO opens today
The highly-anticipated initial public offering (IPO) of Life Insurance Corporation (LIC) of India will open for subscription today. The IPO, which is touted to be the country’s largest-ever public issue, will see the government selling 3.5% stake in the insurer, lower than the earlier offer of 5%, comprising 22.13 crore shares of ₹10 face value. The government is expected to raise around ₹21,000 crore through the issue at the upper end of the price band of ₹902-949 per share.
Corporate earnings
The major companies that are slated to release their earnings numbers today include Kotak Mahindra Bank, Adani Green Energy, Adani Total Gas, Equitas Small Finance Bank, Havells India, Tata Consumer Products. Among others, ABB India, Bombay Dyeing & Manufacturing Company, CarTrade Tech, Deepak Nitrite, Laxmi Organic Industries, Mahindra EPC Irrigation, Satin Creditcare Network, SIS, Oracle Financial Services Software, Rain Industries, EIH, IIFL Wealth Management, Aptech, Cigniti Technologies, and MAS Financial Services, will also unveil their March quarter results on May 4.
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