Indian equity benchmarks are poised to open lower on Monday, in line with Asian peers, amid fear that deepening tensions between Russia and Ukraine may push crude prices further higher and add inflationary pressure. The negative trends on SGX Nifty also indicated a bearish opening for the domestic bourses, with SGX Nifty futures trading 232 points, or 1.34%, lower at 17,122 on the Singapore Stock Exchange at 8:25 AM.
On Friday, the domestic benchmarks ended sharply lower, snapping their three-session-long gaining streak, as weak global cues and record spike in the U.S. inflation data fuelled fears of aggressive rate hikes by the Federal Reserve. The sustained fund outflow by foreign institutional investors (FIIs) in the backdrop of rising U.S. bond yields and crude prices also dented market sentiments. The BSE Sensex closed 773 points, or 1.3%, lower at 58,153, and the NSE Nifty dropped 231 points, or 1.3%, to 17,375. On the sectoral front, all indices ended in red, while IT and tech stocks declined the most. The top losers on the BSE Sensex pack were Tech Mahindra, Infosys, HCL Technologies, Kotak Mahindra Bank and UltraTech Cement.
Stocks to watch
Eicher Motors: The auto major, that manufactures trucks, buses, and motorbikes, will release its December quarter results today. The owner of Royal Enfield, is expected to report drop in profit due to rising costs and lower volumes.
Dr Reddy's Laboratories: The drug maker has inked a pact with Novartis India to promote and distribute select Novartis products including the Voveran range, the Calcium range and Methergine in India.
Ashok Leyland: The auto major reported a profit of ₹6 crore compared to a loss of ₹19 crore a year ago due to higher volumes and cost management initiatives. The revenue rose 15% year-on-year to ₹5,535 crore.
TVS Motor: The stock will be eyed as its promoter Sundaram Clayton on Friday offloaded nearly 95 lakh shares or 2% stake in the company at an average price of ₹635.97 per share via open market transaction on the BSE. With this, Clayton’s stake in the company dropped to 50.26%, from 52.26% earlier.
Apollo Hospitals: The net profit of the company jumped 81.3% to ₹243.25 crore in the quarter ended December 2021 as against ₹134.15 crore in the year ago period. Total income rose 32.2% YoY to ₹3,656 crore from ₹2,765 crore in the year ago period.
DB Realty: The company posted a net loss of ₹36.34 crore in Q3FY22 as against a net profit of ₹98.59 crore in Q3FY21. Total income fell 35.5% YoY to ₹14.63 crore.
Max Healthcare: The healthcare company has signed a pact to acquire Eqova Healthcare, a company with long-term exclusive rights to aid development and provide medical services to an upcoming 400-bed hospital.
Yes Bank: The private sector lender is planning for an early redemption of tier II bonds of about ₹1,763 crore. The move is part of the bank’s strategy to retire high-cost instruments before close of the current financial year.
Here are the key things investors should know before the market opens today:
Rate hike concerns rattle Wall Street
On Friday, all three major U.S. indices closed lower on Wall Street as prospect of aggressive policy stance from the Federal Reserve and escalating geo-political tensions between Russia and Ukraine triggered sell-off in the market. There is fear in the market that Russian invasion and higher crude prices would exacerbate inflationary pressure and prompt Fed to raise interest rate sooner than expected. The Dow Jones Industrial Average ended 1.43% lower, the S&P 500 tumbled 1.90%, and the Nasdaq Composite plunged 2.78%.
Ukraine-Russia situation roil Asian stocks
Shares in the Asia-Pacific region dropped on Monday as escalating tensions between Ukraine and Russia and fear of rate hike by the U.S. central bank dented market sentiment. The negative cues from Wall Street also dented market sentiment.
The Japanese stock market was the biggest loser in the region, with the benchmark Nikkei 225 plummeting 2.6% following negative cues from Wall Street. South Korea’s KOSPI fell 2%, while the Hang Seng index in Hong Kong tumbled 1.3%. The Straits Times Index in Singapore shed 0.6%.
In mainland China, the Shenzhen component and the Shanghai composite traded marginally lower in early deals.
Meanwhile, Indonesia’s Jakarta Composite fell 0.7% and Taiwan Weighted index dropped 1.74%.
As many as 989 companies are slated to release their December quarter earnings report today. The big companies that will announce their quarterly results today include Eicher Motors, SpiceJet, Adani Enterprises, Adani Wilmar, Coal India, Grasim Industries, Future Retail, Dish TV India, Rossari Biotech, and others.
Among others, AGS Transact Technologies, Apex Frozen Foods, Apollo Micro Systems, Balkrishna Industries, Bharat Dynamics, BGR Energy Systems, Equitas Holdings, Gateway Distriparks, Graphite India, Greenply Industries, Ipca Labs, IRCON International, IVRCL, Jet Airways, KNR Constructions, Manappuram Finance, MEP Infrastructure, MTNL, Nagarjuna Fertilizers, Natco Pharma, NBCC (India), Panacea Biotec, PC Jeweller, PTC India, RailTel Corporation of India, Repco Home Finance, Sadbhav Engineering, Shriram Properties, Spandana Sphoorty Financial, Sterling and Wilson Renewable Energy, Vivimed Labs, and Zuari Global, will also release their earnings report on February 14.
Govt files DHRP with Sebi to launch LIC IPO
The central government on February 13 has filed the draft red herring prospectus (DRHP) of state-owned Life Insurance Corporation of India with market regulator SEBI to launch the highly anticipation IPO. The document revealed that the government may divest 31,62,49,885 shares in insurance giant. Retail quota is fixed as 35% of the issue size translating into around 11.06 crore shares for retail investors.
DIIs turns net sellers, FIIs emerge as net buyers
Foreign institutional investors (FIIs) turned net buyers in the Indian equity market on February 11, while domestic institutional investors (DIIs) turned net sellers. As per the data available on the NSE, FIIs purchased shares worth ₹108.5 crore, while DIIs net offloaded shares worth ₹696.9 crore.
Brent crude breaches $95 on Ukraine conflict worries
Global benchmark Brent crude crossed $95 a barrel to hit seven-year high on Monday as fear of an invasion of Ukraine by Russia, one of the major oil producers, rattled investors’ sentiments. Investors feared that rising geo-political tensions may lead to further supply disruptions in an already-tight market.
During the early Asian trading hours, the U.S. West Texas Intermediate (WTI) crude futures jumped 1.5% to $94.5 a barrel, while the Brent oil futures rose 0.6% to $95.63 per barrel.
On Friday, Brent crude futures settled 3.3% higher at $94.44 a barrel, while U.S. WTI crude surged 3.6% to $93.10 per barrel.
Gold shines as U.S. dollar, treasury yields retreat
Gold prices surged during early trade on Monday as rising tensions between Ukraine-Russia boosted demands for safe-haven assets. Besides, corrections in the U.S. bonds and treasury yields also augur well for the yellow metal. Spot gold was trading 0.9% higher at $1,858.65 per ounce.