Indian equity benchmarks are set to open lower on Thursday, in line with Asian peers and Wall Street, after the U.S. Federal Reserve indicated that it is likely to raise interest rates in March in a bid to curb inflation. Adding to it, rising tensions in the Russia-Ukraine conflict and monthly derivatives expiry may also inject volatility in the market. The negative trends on SGX Nifty also indicated a bearish opening for the domestic bourses, with SGX Nifty futures trading 347 points, or 2%, lower at 16,873 on the Singapore Stock Exchange at 8:00 AM.
On Tuesday, the Indian equities closed higher in choppy trade as investors stepped in to buy beaten-up stocks. Snapping five session losing streak, the BSE Sensex ended 367 points, or 0.64%, higher at 57,858, while the NSE Nifty 50 climbed 129 points, or 0.75%, to settle at 17,278. In line with the benchmark indices, the broader markets also ended higher. The S&P BSE Midcap index jumped 1.03%, while the S&P BSE Smallcap index rose 0.81%. On the sectoral front, PSU and power indices were among top gainers, while IT and consumer durables emerged as worst performers. Among individual stocks, Maruti Suzuki India, Axis Bank, State Bank of India, IndusInd Bank, and Bharti Airtel were top five gainers on the BSE Sensex.
Stocks to watch
Bharat Petroleum Corporation Ltd (BPCL): The state-run oil marketing player has proposed to invest ₹10,000 crore over the next five years to establish city gas distribution networks in the cities for which it bagged licences.
Axis Bank: Global rating agency Standard and Poor's (S&P) has upgraded its outlook on Axis Bank from "stable" to "positive", citing improvement in asset quality of the lender. The agency also affirmed 'BB+' long-term and 'B' short-term issuer credit ratings on the bank under revised criteria.
Cipla: The pharma major reported a 2.6% YoY decline in its consolidated profit at ₹729 crore for the third quarter ended on December 31, 2021. Total revenue rose by 6 per cent YoY to ₹5,479 crore.
Jindal Steel & Power: ICRA has raised its rating from ‘A+’ to ‘AA-‘ with 'stable' outlook on the long term bank facilities. The agency has also reaffirmed the rating of A1+ for short term bank facilities of the company.
Indiabulls Real Estate: The realty company reported a loss at ₹87 crore in Q3FY22, while revenue fell to ₹322.8 crore from ₹721.6 crore in the year ago period.
Federal Bank: The private sector lender posted a 29% YoY rise in net profit at ₹522 crore for the third quarter ended December 2021 on sharp reduction in provisions and marginal improvement in net interest margin. Net interest income (NII) was up 7 per cent YoY at ₹1,539 crore.
Here are the key things investors should know before the market opens today:
Wall Street falls on rate hike worries
On Wednesday, the major U.S. indices closed lower in volatile trade after the policymakers made it clearer that the Federal Reserve is set to hike the key benchmark rate by March to check inflation. Following the conclusion of the two-day policy meeting, Fed chairman Jerome Powell signalled that the cheap money flow in the economy could soon come to an end.
"With inflation well above 2%, and a strong labour market, the committee expects it will soon be appropriate to raise the target range for the federal funds rate," the Federal Open Market Committee said in a statement.
On Wall Street, the S&P 500 closed 0.25 lower after rising more than 2% in early trade. In a similar trend, the Dow Jones Industrial Average slipped 0.4%, while the Nasdaq Composite ended 0.2% higher.
Asian shares tense on Fed outlook, Ukraine crisis
Shares in the Asia-Pacific region fell sharply in early trade on Thursday, tracking weak cues from Wall Street, amid concerns about sooner-than-expected policy tightening by the US Federal Reserve. The escalating tensions in the Russia-Ukraine conflict also triggered sell-off in the market.
The Japanese stock market fell sharply in early trade, with the benchmark Nikkei 225 plummeting 2.5% following negative cues from Wall Street. The concerns about the fast spread of the coronavirus omicron variant in the country also weighed on investor sentiments.
South Korea’s KOSPI emerged as the biggest loser in the region by crashing more than 3%, while the Hang Seng index in Hong Kong tumbled 2%. Australia’s ASX 200 index also dropped 1.7%.
In mainland China, the Shenzhen component and the Shanghai composite plunged 1.5% and 0.7%, respectively.
Meanwhile, Indonesia’s Jakarta Composite and Taiwan Weighted index dropped marginally lower, while the Straits Times Index in Singapore shed 0.5%.
Brent crude hits $90 on supply concerns
Global benchmark Brent crude touched $90 a barrel for the first time in seven years on Wednesday as rising geopolitical tensions between Russian and Ukraine rattled investors’ sentiments. Investors feared that tensions in Middle-East may lead to further supply disruptions in an already-tight market.
In the overnight trade, U.S. West Texas Intermediate (WTI) crude rose 2% to $87.35 per barrel and Brent surged 2% to close at $89.96 a barrel after briefly breaching $90 for the first time since October 2014.
During the early Asian trading hours, the U.S. WTI crude futures were down 0.69% at $86.75 a barrel, while the Brent oil futures dropped 0.37% to $88.22 per barrel.
The big companies that will announce their December quarter results today include Bharat Heavy Electricals, Punjab National Bank, Canara Bank, LIC Housing Finance, Wockhardt, RBL Bank, and others.
Among others, Accelya Solutions India, AIA Engineering, Arvind, Aurionpro Solutions, Birlasoft, CG Power and Industrial Solutions, Chalet Hotels, Coforge, Colgate-Palmolive, Dalmia Bharat, Exxaro Tiles, Fino Payments Bank, GHCL, Gujarat Mineral Development Corporation, Home First Finance Company, HSIL, Indus Towers, Laurus Labs, Mahindra Logistics, CE Info Systems, Motilal Oswal Financial Services, Nippon Life India Asset Management, PSP Projects, Route Mobile, Transport Corporation of India, Vaibhav Global, Wabco India, will also release their earnings report on January 27.
FIIs remain net sellers, DIIs turn net buyers
Foreign institutional investors (FIIs) continued to remain net sellers in the Indian equity market on January 24, while domestic institutional investors (DIIs) turned net buyers. As per the data available on the NSE, FIIs sold shares worth ₹7,094.5 crore, while DIIs net bought shares worth ₹4,535.5 crore.
IMF hikes India's GDP growth forecast to 9% for FY23
The International Monetary Fund (IMF) has upgraded its projection for growth in India's gross domestic product (GDP) by 50 basis points (bps) to 9% for financial year 2022-23. The GDP growth forecast for FY24 has also been raised by 50 bps to 7.1%.
As per the World Economic Outlook report, the revision in India’s growth outlook was attributed to improvement in India's credit growth and "better-than-anticipated performance of the financial sector".
Adani Wilmar IPO opens today
The ₹3,600-crore initial public offering (IPO) of Adani Wilmar, a 50:50 joint venture between Gautam Adani's Adani Group and Singapore-based Wilmar Group, will open for public subscription today. The FMCG company, which sells cooking oils under the Fortune brand, has fixed a price band of ₹218-230 a share for its IPO. The three-day offering will be a completely fresh issue of equity shares and there will not be any secondary offering.