The BSE Sensex and the NSE Nifty are set to open lower on Tuesday, tracking weak cues from Asia and overnight losses in U.S. stocks. The growing concerns that central banks’ aggressive policy stance to curb inflation may push the global economy into recession acted as a negative catalyst for the markets. The fresh concerns about the energy crisis in Europe after Russia's state-owned energy giant Gazprom threatened to halt natural gas supplies to Europe for three days at the end of the month also spooked investors’ sentiments. Back home, negative trends on SGX Nifty also indicated a gap-down opening for the domestic bourses, with SGX Nifty futures trading 78 points, or 0.45%, lower at 17,412 levels on the Singapore Stock Exchange at 8:20 AM.
On Monday, the Indian equities ended lower for the second straight session amid profit booking and weak global cues. The market wiped out ₹6.5 lakh crore of investors' wealth in just two sessions amid renewed concerns about global economic growth in the backdrop of aggressive rate hike programme to combat inflation also weighed on market sentiments. The 30-share BSE Sensex plunged 872 points, or 1.46%, to close at 58,774 levels, and the NSE Nifty50 dived 268 points, or 1.51%, to 17,491. Barring ITC and Nestle India, all stocks in the Sensex pack closed in negative terrain, while Tata Steel, Asian Paints, Wipro, Sun Pharma, Larsen & Toubro, Bajaj Finance, UltraTech Cement, and Bajaj Finserv declined the most. Among sectors, all indices ended lower, with metal, realty, basic materials, consumer discretionary goods & services falling by more than 2%.
Stocks to watch
LIC Housing Finance: The mortgage lender on Monday announced a 0.50% hike each in its lending rates. The development came after the Reserve Bank raised its key lending rate by 1.40% since May to ease inflationary pressure on the economy.
Future Retail: The crisis-hit company, which faces insolvency proceedings, has received claims of ₹21,057 crore from 33 financial creditors, as per the data released by the Future group company.
Larsen & Toubro (L&T): The hydrocarbon onshore division of L&T’s energy business has secured a large contract from Indian Oil Corporation Ltd. A project worth ₹2,500 crore to ₹5,000 crore is classified as a large project by L&T.
RBL Bank: The board of the private sector lender has approved the issue of debt securities on private placement basis, up to an amount of ₹3,000 crore, subject to certain approval.
Infosys: The IT major has reportedly cut the variable payout for employees for the first quarter of FY23 due to the impact on margins in the backdrop of rising employee overhead costs. The move came days after rivals TCS and Wipro deferred or reduced variable payouts for the April-June quarter.
IIFL Finance: The financial services company said the board of directors of its subsidiary IIFL Home Finance have approved the allotment of its 53,76,457 equity shares to the subsidiary of Abu Dhabi Investment Authority.
NTPC: The state-owned power company on Monday announced first part capacity of 10 MW out of 20 MW Gandhar Solar PV project at Gandhar, Gujarat, on commercial operation.
Lemon Tree Hotels: The company has inked a licence agreement for a 65-room hotel at Hubli, Karnataka, under its brand 'Lemon Tree Hotel'.
Tata Chemicals: The stock will be under the NSE F&O ban today as it 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 recession fear
In the overnight trade, the U.S. indices closed lower amid growing concerns that the Federal Reserve’s rate hike measures to curb inflation will weaken the economy and push it into a recession. Investors remained wary ahead of the speech by Fed chairman Jerome Powell on Friday at Jackson Hole, Wyoming, on the outlook for inflation and interest rate hikes. The Dow Jones Industrial Average dived 1.6%, the S&P 500 plunged 1.8%, and the tech-heavy Nasdaq Composite shed 2.2% in the overnight trade.
Asian shares drop
Shares in the Asia-Pacific region were flashing in red in opening trade on Tuesday, tracking negative finish at Wall Street overnight as concerns about Federal Reserve monetary tightening soured investors’ appetite for riskier assets.
Regional heavyweight Japan’s Nikkei 225 dropped 1.2%, South Korea’s Kospi fell 0.9%, and the Hang Seng index in Hong Kong shed 0.7%. Similarly, Taiwan Weighted index plunged 1%, Australia’s ASX 200 declined 0.5%, and Singapore’s Straits Times dropped 0.7%.
Bucking the trend, Indonesia’s Jakarta Composite surged 0.8%.
Markets in mainland China were trading lower, with the Shanghai Composite and the Shenzhen Component falling by 0.4% and 0.6%, respectively.
FIIs, DIIs net sellers
The foreign institutional investors (FIIs) and domestic institutional investors (DIIs) turned net sellers in the Indian equity market on August 22. As per the exchange data, FIIs net sold shares worth ₹453.77 crore, while DIIs net offloaded stocks worth ₹85.06 crore.
Crude prices rise
Brent and U.S. crude prices rose nearly 1% in early trade on Tuesday, after falling as much as 4.5% in overnight trade, after Saudi Arabia warned that OPEC+ production could cut output to bring down volatility and improve liquidity in the global energy market. The concerns about the supply crisis in Europe also pushed prices higher as Russian oil major Gazprom has said it would halt natural gas supplies to Europe for three days at the end of the month.
In early Asian trading hours on Tuesday, the Brent oil for October delivery was up 0.78% at $97.23 per barrel, while the U.S. West Texas Intermediate (WTI) crude September futures rose 0.8% to $91.1 a barrel.