Sensex, Nifty to open in red; Paytm, HDFC Bank, Lupin, Gail, Hindalco, Tech Mahindra in focus

Indian equity benchmarks are poised to start the week on a bearish note, tracking mixed trends across Asian markets ahead of the U.S. central bank’s policy meeting. The negative trends on SGX Nifty also indicated a bearish opening for the domestic bourses, with SGX Nifty futures trading 54 points, or 0.33%, lower at 16,595 on the Singapore Stock Exchange at 7:40 AM.

Key factors that will impact trading in a holiday-shortened week include the U.S. Federal Reserve policy meeting, developments on the Russia-Ukraine war, crude oil prices, and domestic inflation data.

Last week, the benchmark indices concluded the week on a positive note as investors cheered the victory of the Bharatiya Janata Party (BJP) in four out of five state elections. The ease in commodity prices, especially oil, and bargain hunting in beaten-down stocks also supported the market. The BSE Sensex rose 2.24% to 55,550 during the week, and the 50-share Nifty index surged 2.37% to 16.630 during the same period. Nine of the 10 most valued companies together added ₹1.91 lakh crore in market valuation last week, with Reliance Industries, Infosys, and TCS emerging as the biggest gainers. ICICI Bank was the only laggard from the top-10 pack.

Stocks to focus

One97 Communications (Paytm): The Reserve Bank of India (RBI) on Friday barred Paytm Payments Bank from onboarding new customers with immediate effect, citing certain supervisory concerns. The banking subsidiary of Paytm parent One97 Communications had received RBI’s approval to operate as a scheduled payments bank in December last year.

HDFC Bank: The private lender has said the RBI has removed ban on the business generating activities planned under the Bank's Digital 2.0 program. The restrictions were imposed in December 2020.

Ruchi Soya: The FMCG company’s follow-on public offer (FPO) will open from March 24-28, 2022. The Patanjali Group-owned company plans to raise up to ₹4,300 crore through this FPO.

Lupin: The pharma major has received approval from the US Food and Drug Administration (FDA) for its new drug application (ANDA), Vigabatrin for Oral Solution USP (500 mg). The product will be manufactured at Lupin's manufacturing unit in Goa.

Gail (India) Ltd: The board of directors of the oil major has approved the second interim dividend of ₹5 per share for FY22. The company has fixed March 22 as the record date for the purpose.

Tech Mahindra: The company's board has given a nod to acquire a 100% equity stake in Thirdware Solutions Limited for $4.2 crore.

Jubilant FoodWorks: The CEO and whole-time director of the company, Pratik Rashmikant Pota, has resigned to pursue opportunities outside Jubilant FoodWorks.

Hindalco: ICICI Prudential Mutual Fund has trimmed its stakes in the company from 3.07% to 3.01%. It has sold 11.81 lakh equity shares in the company via open market transactions on March 9.

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

Wall Street extends fall

On Wall Street, all the three major U.S. indices finished the week on a negative note amid uncertainty about the ongoing Russia-Ukraine war and concerns about rate hikes ahead of the Federal Reserve meeting. The Fed will convene its two-day policy meeting starting Tuesday and is widely expected to raise interest rates from zero for the first time since 2018. Data last week showed consumer prices surged to the highest in 40 years. On Friday, the Dow Jones Industrial Average ended 0.69% lower, the S&P 500 dropped 1.3%, and the Nasdaq Composite plunged 2.18%.

Asian market mixed amid hopes of Ukraine talks

Shares in the Asia-Pacific region were trading mixed in early deals, supported by fall in oil prices and hopes for progress in Russian-Ukraine peace talks. Investors also remained on edge ahead of the U.S. Fed policy meeting this week, with the central bank widely expected to raise interest rate for the first time since the beginning of the pandemic.

Japan’s benchmark index Nikkei 225 traded 0.7% higher, while South Korea’s KOSPI dropped 0.9%. Taiwan's Weighted index rose 0.15% and Australia’s ASX 200 index rallied 1.15%.

The Straits Times Index in Singapore dipped 0.4%, and the Hang Seng index in Hong Kong nosedived 2.8%.

In mainland China, the Shenzhen component fell 1.36%, while the Shanghai Composite tumbled 0.86% in early trade.

Crude prices continue downtrend

The price of Brent crude, the international benchmark, fell further on Monday after Russia assured to fulfill its supply obligations. Russia, a major oil producer, faces sanctions on crude oil exports by the U.S. and its western allies following its invasion of Ukraine. Last week, Brent crude topped $130 a barrel mark, the highest since the 2008 financial crisis, as sanctions on Russian oil spooked market sentiments.

In the early trading hours on Monday, the U.S. West Texas Intermediate (WTI) crude futures dipped 3.12% to $105.93 a barrel, while the Brent oil futures slipped 3.09% to $109.2 per barrel.

FPIs pull out ₹45.6K cr in March so far

Foreign investors have flushed out a total of ₹45,608 crore from domestic markets in March so far, extending its selling spree for the sixth consecutive month. Foreign Portfolio Investors (FPIs) net sold worth ₹41,168 crore from equities, ₹4,431 crore from the debt segment, and ₹9 crore from hybrid instruments, as per the depositories' data.

The market experts fear that foreign investors remain concerned about a spike in commodity price, especially crude oil, as it would put inflationary pressure on the economy since India is a major importer.

EPFO cuts interest rate to 8.1%, lowest in 4-decade

The Employees’ Provident Fund Organisation (EPFO) on Saturday slashed the interest rate on provident fund deposits from the existing 8.5% to 8.1% for the financial year 2021-22. This was the lowest rate in 43 years when EPFO had paid an 8% interest rate in 1977-78.

Labour minister Bhupender Yadav said that the decision was taken after considering the prevailing international conditions and the market situation.