Sensex, Nifty to open in red; Bajaj Auto, IIFL Finance, Dr Reddy's, GMR Infra shares in focus

The Indian benchmark indices, the BSE Sensex and the NSE Nifty, are poised to open sharply lower on Friday after shares dropped in Asia, Europe, and the U.S. ahead of the inflation data. The recent surge in oil price has stoked worries about higher inflation and hawkish policy stance by central banks which may derail the global economic recovery. The bearish trends on SGX Nifty also indicated a negative opening for the domestic bourses, with SGX Nifty futures trading 227 points, or 1.38%, lower at 16,244 on the Singapore Stock Exchange at 7:35 AM.

On Thursday, the Indian share market ended higher, snapping a four-session losing streak, driven by gains in index heavyweights such as Reliance Industries, Infosys, Bharti Airtel, Sun Pharma, and Tech Mahindra. However, persistent foreign fund outflows and weak cues from global peers limited the market’s gain. The 30-share Sensex rose 428 points, or 0.78%, to close at 55,320, and the Nifty50 advanced 122 points, or 0.74%, to settle at 16,478. On the BSE Sensex pack, Dr Reddy’s was the top performer with a 3% gain, followed by Reliance Industries, Bharti Airtel, Sun Pharma, Tech Mahindra, Kotak Mahindra Bank, Wipro, Infosys, among others. On the losing side, Tata Steel, NTPC, UltraTech Cement, Bajaj Finance, SBI, Asian Paints and HCL Tech were among notable losers. Among sectors, barring metal and basic materials, all BSE sectoral indices ended in the green, while telecom, energy, and oil & gas gained the most.

Stocks to watch

Bajaj Auto: The auto major in an exchange filing said it will consider a buyback of its fully paid-up equity shares, which will be discussed in a board meeting on June 14. This would be the first time since 2000, that the company will buyback equity shares of the company.

IIFL Finance: The NBFC firm has said that its wholly-owned subsidiary, IIFL Home Finance, will raise ₹2,200 crore by selling a 20% stake to a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA). The deal completion is subject to regulatory approvals.

HDFC Bank, ICICI Bank: The country’s leading private lenders have raised interest rates, following the rate hike by the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) on Wednesday. HDFC Bank says the MCLRs have been hiked by 35 bps across all tenors, with effect from June 7, 2022. In the case of ICICI Bank, the overnight and one-month MCLRs have raised to 7.30%.

Dr Reddy's Laboratories: The drug major on Thursday said its subsidiary has signed a deal with U.S.-based Olema Pharmaceuticals Inc to research, develop and commercialise novel small molecule inhibitors of an undisclosed oncology target.

GMR Infrastructure: DVI Fund Mauritius Ltd, a public shareholder in the company, divested 3.3% stake in the airport handling company for ₹720 crore through an open market transaction.

Escorts: Farm machinery and construction equipment maker has received regulatory approvals for changing its name to Escorts Kubota Ltd. The name was changed after Japan's Kubota Corporation raised its stake in Escorts to 44.8% by subscribing to new equity shares.

Shriram Transport Finance Company (STFC): The finance firm has secured long-term funding of $250 million from the U.S.-based International Development Finance Corporation (DFC).

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

Wall Street falls ahead of CPI data

In the overnight trade, all three major U.S. indices closed lower, registering their biggest daily percentage fall since mid-May, as investors turned jittery ahead of CPI data on Friday which is expected to show consumer prices remained higher in May. The market experts fear that higher-than-expected inflation readings may prompt the U.S. Federal Reserve to hike interest rates more aggressively than previously estimated. The Dow Jones Industrial Average ended 1.94% lower, the S&P 500 dropped 2.38%, and the Nasdaq Composite fell 2.75%.

Asian stocks follow Wall Street lower

Shares in the Asia-Pacific region opened lower on Friday, tracking negative closing on Wall Street overnight, as investors weighed the impact of high inflation and subsequent rate hike on the global economic growth. The recent rally in crude prices also raised concerns about higher inflation and monetary tightening.

Regional heavyweight Japan’s Nikkei 225 dropped 1.2%, South Korea’s KOSPI fell 1.1%, and the Straits Times Index in Singapore tumbled 0.9%.

Similarly, the Hang Seng index in Hong Kong plunged 1.7%, Taiwan’s Weighted index dived 1.1%, and Australia’s ASX 200 slipped 0.7%.

In mainland China, the Shenzhen Component was down with marginal losses, while the Shanghai Composite fell 0.8% in early trade.

Oil prices retreat 1%

The price of Brent and U.S. crude fell nearly 1% in early trade on Friday amid renewed concerns about lockdown restrictions in China, the world’s largest oil consumer, amid rising Covid-19 cases. The fear of fresh curbs in China raised uncertainties regarding the demand outlook.

In Asian trading hours, the Brent oil for July delivery was down 0.8% at $122 per barrel, while the U.S. West Texas Intermediate (WTI) crude July futures fell 0.86% to $120.47 a barrel.

FIIs, DIIs data

The foreign institutional investors (FIIs) continued fund outflows from the Indian equity market on June 9, while domestic institutional investors (DIIs) continued to support the market. As per the exchange data, FIIs net sold shares worth ₹1,512.64 crore, while DIIs net purchased shares worth ₹1,624.90 crore.