Indian equity benchmarks, the BSE Sensex and the NSE Nifty, are set to open sharply lower on Thursday, tracking weak cues from Asian peers which tumbled after Wall Street suffered its worst sell-off in two years overnight. The continued selling by foreign investors and uptrend in crude prices may also weigh on investors’ minds and persistent concerns about economic growth may further dent sentiments. The negative trends on SGX Nifty also indicated a gap-down opening for the domestic bourses, with SGX Nifty futures trading 293 points, or 1.8%, lower at 15,942 on the Singapore Stock Exchange at 8:30 AM. Investors will also keep an eye on corporate earnings as some major companies such as HPCL, Ashok Leyland, Dr Reddy’s Laboratories, Godrej Consumer Products, will release their March quarter earnings.

Snapping two-session gaining streak, the domestic bourses ended marginally lower in a volatile session on Wednesday, led by selling in power, IT and bank stocks as well as mixed global cues. The persistent foreign fund outflows and continued rise in crude oil prices further dented market sentiments. The BSE Sensex ended 110 points, or 0.20%, lower at 54,208, and the broader NSE Nifty fell 19 points, or 0.12%, to settle at 16,240. The top laggards on the Sensex pack were PowerGrid, Tech Mahindra, SBI, L&T, Bajaj Finserv, Bharti Airtel, NTPC and Wipro. In contrast, HUL, UltraTech Cement, Asian Paints, Sun Pharma, ITC and Axis Bank were among notable gainers.

Shares to watch

ITC: The cigarettes-to-hotels major has registered a 11.60% year-on-year (YoY) rise in consolidated profit after tax (PAT) at ₹4,259.68 crore in the March quarter, driven by growth across segments. The company’s consolidated revenues rose 15.25% to ₹17,754.02 crore, from ₹15,404.37 crore in the year-ago period.

Lupin: The pharma major has posted a net loss of ₹511.9 crore in March quarter of fiscal 2021-22 due to higher input costs and impairment expense. Sales rose 2.8% YoY to ₹3,864.5 crore, while EBITDA dropped 63% to ₹282 crore.

IDBI Bank: The LIC-controlled lender has offloaded its entire stake of over 19% in Asset Reconstruction Company (India) to Avenue India Resurgence Pte. The bank, however, did not disclose the deal value.

Manappuram Finance: The gold loan company has reported over 44% drop in net profit at ₹261 crore in the quarter ended March 2022, against ₹468 crore in the same quarter of the previous year. The net interest income also fell by 10.2% YoY to ₹986.50 crore in Q4 FY22.

LIC Housing Finance: The net profit of the company jumped 180% to ₹1,118.6 crore for the fourth quarter ended March 2022 (Q4 FY22), as compared to ₹398.92 crore in the year-ago period. The company’s board recommended a dividend of ₹8.5 per share of ₹2 each (425%) for 2021-22.

Adani Group: Billionaire Gautam Adani-led company has forayed into the health care space by establishing a wholly-owned subsidiary, Adani Health Ventures (AHVL). The new business will be engaged in healthcare-related activities like setting up of medical and diagnostic facilities, research centres.

Brookfield India REIT: The real estate trust has announced ₹170 crore or ₹5.10 per unit dividend for the March quarter, taking the total cumulative payout to ₹690 crore or ₹22.10 per share for the full fiscal 2022.

Indian Overseas Bank (IOB): The state-owned lender has posted a 58% growth in Q4 FY22 to ₹552 crore, as compared to the January to March quarter of 2020-21, on account of lower provisioning for bad loans.

Sun Pharmaceutical Industries: The drugmaker plans to launch a lipid-lowering oral drug, Bempedoic Acid, which helps to reduce low-density lipo-protein (LDL) cholesterol.

F&O ban: Shares of Delta Corp, GNFC, Indiabulls Housing Finance, and Punjab National Bank will be under F&O ban today as their securities have crossed 95% of the market-wide position limit.

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

Wall Street suffers worst loss since June 2020

In the overnight trade, the major U.S. indices recorded one of the worst one-day losses, dented by weak earnings reports by retailers which raise concerns about the world’s largest economy. The retail company Target lost a quarter of its value in a single day, after its first-quarter profit plunged half and the company warned of a bigger margin hit on rising fuel and freight costs. Among others, consumer goods companies Target Corp, Procter & Gamble, Coca-Cola, and Walgreens Boots Alliance were top losers. The Dow Jones index dived 3.6% to register its biggest single-day loss since June 2020, while the S&P 500 closed 4% lower. The tech-heavy Nasdaq Composite tumbled 4.7%.

Asian stocks follow Wall Street lower

Shares in the Asia-Pacific region fell sharply in opening trade on Thursday, following mayhem on Wall Street overnight, as disappointing earnings reports by major U.S. companies further fueled worries about corporate profitability and rising inflation. The market sentiment was also impacted by record surge in the United Kingdom's inflation and a faster-than-expected acceleration in Canada.

Regional heavyweight Japan’s Nikkei 225 tumbled 2.5%, the Straits Times Index in Singapore fell 0.7%, and Australia’s ASX 200 dropped 1.4%. Taiwan’s Weighted index plunged 2.4%, while Indonesia’s Jakarta Composite dropped 0.4%.

The Hang Seng index in Hong Kong was the top laggard in the regional market with a 3.2% loss. In mainland China, the Shenzhen Component and the Shanghai Composite fell 0.8% each in early trade.

Oil prices steady

The price of Brent and U.S. crude were up nearly 1% in early trade on Thursday after ending lower in volatile trade amid optimism that easing Covid-19 restrictions in China would boost demand prospects. However, sharp fall in the U.S. crude stockpiles and looming fear of a ban on Russian oil imports pushed oil prices higher.

In Asian trading hours, the Brent oil for July delivery climbed 1.2% to $110.4 per barrel, while the U.S. West Texas Intermediate (WTI) crude June futures rose 0.8% to $107.9 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 18, while domestic institutional investors (DIIs) continued to support the market. As per the exchange data, FIIs net sold shares worth ₹1,254.6 crore, while DIIs net purchased shares worth ₹375.6 crore.

Corporate earnings

The major companies that are expected to release their March quarter earnings today include Ashok Leyland, Bosch, Chambal Fertilisers & Chemicals, Container Corporation of India, Dr Reddy’s Laboratories, Endurance Technologies, Gland Pharma, Godrej Consumer Products, HPCL, Novartis India, Ramco Systems, Punjab & Sind Bank, Rossari Biotech, Ujjivan Financial Services, and Suryoday Small Finance Bank.

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