Indian benchmarks BSE Sensex and NSE Nifty are set to bell the day in negative territory, following weak cues from Asian peers and overnight losses on Wall Street as investors await another large interest rate hike by the U.S. Federal Reserve. The Fed is widely expected to lift rates by at least 0.75 percentage points for its third consecutive month in its policy meeting tonight. The weak trends on SGX Nifty also indicated a weak opening for the domestic bourses, with SGX Nifty futures trading 80 points, 0.45%, lower at 17,715 levels on the Singapore Stock Exchange at 8:20 AM.
On Tuesday, the Indian equity benchmarks ended higher for the second straight session, driven by broad-based buying across sectors ahead of the crucial U.S. Federal Reserve’s policy meeting outcome. The 30-share Sensex settled 578 points, or 0.98% higher, at 59,720, after rising as much as 1.6% during the session. Similarly, the NSE Nifty closed up by 194 points, or 1.10%, at 17,816. All Sensex constituents, barring Nestle India, PowerGrid, Infosys, and Reliance Industries, ended in green, while Sun Pharma, IndusInd Bank, Dr Reddy's, Tata Steel, and Titan topped the chart. On the sectoral front, all indices ended in positive terrain, led by healthcare, and consumer durables, which rose more than 2%. Among others, auto, consumer discretionary, metal, and commodities settled with more than 1% gain.
Stocks to watch
ACC, Ambuja Cements: Shares of billionaire Gautam Adani-led shares will be in focus after a report revealed that Adani Group pledged shares worth about $13 billion in two Indian cement companies days after completing the acquisition from their parent company, Holcim.
YES Bank: The board of the private sector lender has approved the sale of stressed loans worth ₹48,000 crore to JC Flowers Asset Reconstruction. The bank also informed that the RBI has approved the appointment of former RBI Deputy Governor Rama Subramaniam Gandhi as non-executive (part-time) chairman of the bank for a period of three years effective from September 20.
Mahindra & Mahindra (M&M): The auto major has announced it will acquire an additional 17.41% stake in Swaraj Engines Ltd from Kirloskar Industries Ltd (KIL) for ₹296 crore. With this, the company’s shares in Swaraj Engines will increase to 52.13% from the existing 34.72%.
Central Bank of India: The Reserve Bank of India on Tuesday removed the Central Bank of India from the so-called Prompt Corrective Action (PCA) framework, subject to certain conditions and continuous monitoring.
NDTV: New Delhi Television (NDTV), which faces a hostile takeover bid from Adani Group, has said that its promoters will move the Supreme Court against an order passed by the Securities Appellate Tribunal (SAT) asking them to pay ₹5 crore as penalty for the alleged non-disclosure of loan agreements.
SpiceJet: The budget carrier has sent about 80 pilots on leave without pay for three months to cut down its costs. The loss-making airline is operating less than 50% of flights, following the July 27 order of the Directorate General of Civil Aviation (DGCA) in the wake of technical snags.
Hero MotoCorp, HPCL: The auto major has teamed up with the state-owned oil major to set up charging infrastructure for electric two-wheelers in the country.
Tata Steel: The steel major has raised ₹2,000 crore through NCDs issue after its board approved the allotment of 20,000 non-convertible debentures with face value ₹10 lakh each to identified investors on private placement basis. The NCDs will be listed on the Wholesale Debt Market (WDM) segment of BSE.
Zydus Lifesciences: The drug major has received approval from European Commission for marketing authorisation for Nulibry (fosdenopterin) for injection as the first therapy for the treatment of patients with molybdenum cofactor deficiency (MoCD) Type A.
Wipro: The IT major has entered into partnership with the U.K.-based Finastra to power digital transformation for corporate banks in India.
NSE F&O ban: Delta Corp, Escorts, India Cements, PVR, and RBL Bank will be under the NSE F&O ban today.
Here are the key things investors should know before the market opens today:
Wall Street ends lower
In the overnight trade, all three major U.S. indices closed lower as investors braced for hawkish stance from US Federal Reserve policymakers. The central bank is expected to raise rates by a minimum of 0.75 basis points for its third straight month, at its policy meeting tonight. There is also speculation in the market that the Fed may lift rates by 100 basis points to tame inflation. Ahead of the policy announcement, the Dow Jones Industrial Average fell 1%, the S&P 500 dropped 1.1%, and the Nasdaq Composite shed 0.9%.
Asian shares fall on rate hike concerns
Shares in the Asia-Pacific region were under stress in opening trade on Wednesday, tracking negative closing on Wall Street overnight as investors turned jittery ahead of the Federal Reserve’s policy decision. There is fear in the market that the Fed's aggressive stance to cool U.S. inflation may push the world’s largest economy into a recession as a higher rate would impact consumer spending.
Japan’s benchmark index Nikkei 225 was the worst performer in the region with a loss of 1.4%, followed by the Hang Seng index in Hong Kong, which tumbled 1.35%. South Korea’s Kospi was down 0.85%, while the Straits Times in Singapore traded flat near the baseline.
Similarly, Taiwan’s Weighted index dropped 0.35%, Australia's ASX 200 shed 1.3%, and Indonesia’s Jakarta Composite fell 0.55%.
Markets in mainland China were under pressure, with the Shanghai Composite and the Shenzhen Component falling by 0.5% and 0.8%, respectively.
FIIs, DIIs turn net buyers
Foreign institutional investors (FIIs) and domestic institutional investors (DIIs) turned as net buyers in the Indian equity market on September 20. As per the exchange data, FIIs net purchased shares worth ₹1,196.19 crore, while DIIs net brought stocks worth ₹131.94 crore.
Crude prices edge higher
The crude oil edged higher during early Asian trade on Wednesday, after falling nearly 1% in overnight trade. Traders fear that a higher-than-expected rise in interest rate by the Fed would impact crude demand. At the time of reporting, the Brent oil for November delivery was up 0.5% at $91.08 per barrel, while the U.S. West Texas Intermediate (WTI) crude October futures rose 0.37% to $84.25 a barrel.