The BSE Sensex and the NSE Nifty are set to open higher on Tuesday, following strong cues from Asia and on Wall Street. Shares in the Asia-Pacific region were trading higher, following an extended rally on Wall Street overnight ahead of the crucial inflation data, which will determine the quantum of rate hike by the Federal Reserve. The positive trends on SGX Nifty also indicated a gap-up opening for the domestic bourses, with SGX Nifty futures trading 105 points, 0.6%, higher at 18,047 levels on the Singapore Stock Exchange at 7:40 AM. Investors will also react to domestic macroeconomic data, which showed that India's factory output slowed down in July, while retail inflation rose to 7% in August. As per the Ministry of Statistics & Programme Implementation data, the Index of Industrial Production (IIP) recorded a lower-than-expected growth of 2.4% in July 2022, from 12.3% the previous month and 11.5% in the corresponding month last year. Another report showed that Consumer Price Index (CPI) inflation climbed to 7% in August, bucking the three-month downward trend, due to higher food prices.
The Indian equity benchmarks started the week on a positive note, extending gaining streak for the third straight session on Monday, led by gains in banking, IT, and energy stocks amid positive global equities. The BSE Sensex reclaimed crucial 60K levels, with the 30-share barometer rising 322 points to settle at a three-week high of 60,115 levels. Similarly, the broader NSE Nifty climbed 103 points to close at 17,936 points. In the last three sessions, Sensex rallied 1,086 points, while Nifty gained nearly 312 points, driven by sustained buying by foreign investors and ease in crude prices. “Domestic economy is witnessing strong vigor and the same is assisting a steady growth in Indian equities. A 15.5% YoY increase in bank credit during August suggests that the economy is recovering rapidly,” Vinod Nair, Head of Research at Geojit Financial Services said.
Stocks to watch
Reliance Industries: The telecom arm of the group, Reliance Jio Infocomm, has reportedly received a letter of intent (LoI) from the Telecom Department for satellite communication services. The LoI was issued to Jio Satellite Communications Ltd (JSCL), the a satellite unit of Reliance Jio Infocomm.
NDTV: The media firm, which faces hostile takeover from Adani Group, on Monday said it has paid a ₹10 lakh penalty to SEBI as directed by the Securities Appellate Tribunal (SAT), in a case pertaining to alleged non-disclosure of a loan taken by the company’s promoters.
Tata Consultancy Services: The U.S.-based C&S Wholesale Grocers, Inc, an industry leader in supply chain solutions and wholesale grocery supply, has selected the OT major to build its new operations platform on Google Cloud.
Future Lifestyle Fashions: The crisis-hit company is seeking the approval of its shareholders for three special resolutions, including the appointment of Bharat Ram and Neelam Chhiber as independent directors. The company also seeks shareholders' nod on the sale, lease, transfer or otherwise alienate/dispose of fixed assets.
Tata Consumer Products Ltd (TCPL): The stock will be in focus amid a report that Tata Group is in talks with Bisleri International to acquire a stake in the packaged water company. In a separate development, the company has entered the health supplements segment with the launch of the ‘Tata GoFit’ range for women.
JSW Steel: The steel major has reported a 22% growth in crude steel production in August this year to 16.76 lakh tonnes as compared to 13.77 lakh tonnes in the same month last year.
Vedanta: The mining major has reportedly selected Gujarat for its semiconductor project, which will be developed under its $20 billion joint venture with Taiwan's Foxconn. The company has obtained financial and non-financial subsidies including on capital expenditure and cheap electricity from Gujarat to build the semiconductor plants, as per report.
HDFC Life Insurance Company: Abrdn Plc, Edinburg-based finance and insurance company, is likely to sell 43 million shares in the company through a block deal at a price band of ₹564-578.5 apiece. Abrdn Plc, previously known as Standard Life, is expected to raise up to $313 million by its share sale.
NSE F&O ban: Indiabulls Housing Finance, Ambuja Cements, and Delta Corp will be under the NSE F&O ban list today as their derivative contracts have crossed 95% of the market-wide position limit.
Here are the key things investors should know before the market opens today:
Wall Street ends higher for 4th day
All three major U.S. indices closed higher for the fourth straight session on Monday ahead of a key inflation data which is scheduled to be released tonight. The investor will keep a close eye on the U.S. inflation reading as it would determine how aggressive the Federal Reserve will be next week in raising interest rates. The market is expecting a third consecutive hike of 75 basis points (bps) in rates in the September policy meeting as inflation is projected to remain at elevated levels. The Dow Jones Industrial Average ended 0.7% higher, the S&P 500 gained 1%, and the Nasdaq Composite added 1.3%.
Asian share rise
Shares in the Asia-Pacific region were flashing in green in opening trade on Monday, led by South Korea’s Kospi, following a positive finish on Wall Street overnight. The market saw a spurt in buying activities amid optimism that the Fed will raise rates by less than expected later this month as August U.S. consumer price would ease due to fall in commodity prices.
Regional heavyweight Japan’s Nikkei 225 rose 0.3%, Australia's ASX 200 gained 0.4%, and the Straits Times in Singapore added 0.2%.
South Korea’s Kospi was the best performer in the region with a 2.2% gain on its return to trade after a holiday Monday. The Taiwan Weighted index climbed 0.7% and Indonesia’s Jakarta opened higher.
Bucking the trend, the Hang Seng index in Hong Kong was trading flat with a negative bias.
Markets in mainland China were trading marginally higher, with the Shanghai Composite and the Shenzhen Component rising by 0.1% and 0.2%, respectively.
FIIs extend buying streak
Foreign institutional investors (FIIs) extended their buying streak in the Indian equity market on September 12, while domestic institutional investors (DIIs) remained net sellers. As per the exchange data, FIIs net brought shares worth ₹2,049.65 crore, while DIIs net sold stocks worth ₹890.51 crore.
Crude prices edge lower
The crude price edged lower in early trade on Tuesday as Covid-19 restrictions in China, the world’s largest oil consumer, and the potential interest rate hikes in the United States and Europe dented the demand outlook. However, concerns about global supply when a European Union oil embargo on Russian oil takes effect in early December limited losses.
In early Asian trading hours on Tuesday, the Brent oil for November delivery fell 0.7% to $93.3 per barrel, while the U.S. West Texas Intermediate (WTI) crude October futures dropped 0.6% to $87.2 a barrel.