Sensex, Nifty to open lower; RIL, Bajaj Auto, L&T Info, JSW Energy in focus

Indian benchmark indices, the BSE Sensex and the NSE Nifty, are expected to open lower on Wednesday, tracking weak cues from global peers. The sustained selling by foreign portfolio investors and record rise crude oil prices will also impact trade. The bearish trends on SGX Nifty also indicated a gap-down opening for the Indian equities, with SGX Nifty futures trading 20.5 points, or 0.11%, lower at 18,118 on the Singapore Stock Exchange at 8:25 AM.

On Tuesday, Indian benchmark indices closed lower in volatile trade, following weak cues from the global equity markets. The BSE Sensex ended 554 points, or 0.9%, lower at 60,754, while the NSE Nifty dropped 195 points, or 1.07%, to settle at 18,113. The broader markets also witnessed sharp sell-off, with the S&P BSE Midcap index falling 2.2%, and the S&P BSE Smallcap index dropping 1.92%. On the sectoral front, all indices, barring bank, ended in the negative terrain with realty and auto sectors declining the most. Maruti Suzuki India, the country’s largest car maker, topped the losers’ chart by falling 4.05%. Some of the other notable losers included UltraTech Cement, Tech Mahindra, HCL Technologies, and Tata Steel, which dropped in the range of 2.9-3.8%.

Stocks to focus

Reliance Industries: The telecom arm of RIL, Reliance Jio has said it has prepaid its entire deferred liability worth ₹30,791 crore (including accrued interest) to the Department of Telecommunications (DoT). Last month, the DoT had offered telcos the flexibility to prepay deferred spectrum liabilities.

Bajaj Auto: The auto major is slated to release its December quarter earnings report today. The is likely to report around 20% year-on-year (YoY) drop in net profit in the December quarter compared with ₹1,556.30 crore in the year-ago quarter. Revenue is expected to improve slightly YoY, owing to higher realisation.

Bajaj Finance: The financial services company on Tuesday reported 84.4% year-on-year surge in net profit at ₹1,933.9 crore for the quarter ended December, 2021. The non-bank lender’s net interest income in the quarter jumped 40% year-on-year to ₹5,553 crore with assets under management (AUM) surging 21% YoY to ₹1.3 lakh crore.

RITES: The company has signed pact with CSIR-Central Road Research Institute (CRRI) to explore opportunities for cooperation in the infrastructure sector.

ICICI Prudential Life Insurance: The private life insurer posted a 2% year-on-year rise in its net income to ₹311 crore for the December 2021 quarter, driven by higher sales.

L&T Technology Services: The IT company reported 34% growth in December quarter net profit at ₹248.8 crore, while revenue from operations increased to ₹1,687.5 crore from ₹1,400 crore in the year-ago period.

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

Wall Street ends lower on rate hike fears

In the overnight trade, all the three major U.S. indices closed lower as investors brace for higher interest rates. The market sentiment was dented by lower-than-expected earnings by major U.S. banks such as Goldman, Morgan Stanley, JPMorgan and Citigroup, while rising bond yields hammered the tech sector.

The Dow Jones index tumbled 1.5%, the S&P 500 shed 1.8%, and the tech-heavy NASDAQ plunged 2.6% as higher interest rates fear rattled growth-driven technology stocks.

Asian markets follow Wall Street lower

Shares in Asia-Pacific region traded mostly lower on Wednesday, following an overnight sell-off on Wall Street amid rising bond yields and disappointing earnings by major U.S. banks. The market sentiments were dented by a jump in U.S. bond yields, which reignited fear of interest rate hikes by the U.S. Federal Reserve by March 2022.

Japan’s Nikkei 225 index nosedived 1.8%, led by Japanese conglomerate Sony, which tumbled 9% after Microsoft announced to buy video game publisher Activision Blizzard for nearly $69 billion. South Korea’s KOSPI traded marginally lower.

China mainland shares also edged lower in early deals. The Shenzhen component dropped 0.4% while the Shanghai composite was down 0.1%.

In a similar trend, the Straits Times Index in Singapore dropped marginally lower, Australia’s ASX 200 index fell 0.4%, and Taiwan Weighted Index shed 0.24%. Indonesia’s Jakarta Composite slipped 0.27%, and Thailand’s SET Composite fell 1%.

Bucking the trend, the Hang Seng index in Hong Kong rose 0.5% in early deals.

Corporate earnings

The big companies that will announce their December quarter results today include Bajaj Auto, ICICI Lombard General Insurance Company, Larsen & Toubro Infotech, JSW Energy, Tata Communications, and many more.

Among others, Aptech, CCL Products (India), Ceat, Chembond Chemicals, Continental Securities, DRC Systems India, Orient Green Power Company, JSW Ispat Special Products, Mastek, Nelco, Oracle Financial Services Software, Rallis India, Saregama India, Sterlite Technologies, Syngene International, Tata Investment Corporation, Tejas Networks, Trident Texofab, and TT Limited will also release their earnings report on January 19.

FIIs, DIIs turn net sellers

Foreign institutional investors (FIIs) and domestic institutional investors (DIIs) remained net sellers in the Indian equity market on January 18. As per the data available on the NSE, FIIs net sold shares worth ₹1,254.95 crore, while DIIs net bought shares worth ₹220.20 crore.

Crude oil prices hit 7-year high on escalating geopolitical tensions

In the overnight trade, crude prices surged to their highest level since the 2014 shale-induced oil crash, amid escalating global political tensions. Investors fear that rising tensions in the Middle East and the Russia-West standoff over Ukraine could worsen the already tight supply outlook.

Brent Crude prices hit a fresh seven-year high at over $87.80 a barrel early on Tuesday as tight physical supply and resilient global oil demand pushed price further higher. Futures for West Texas Intermediate (WTI), the main grade of U.S. crude, closed 1.9% higher, while Brent oil futures advanced 1%.

During early Asian trading hours on Wednesday, the U.S. WTI Crude oil futures for March were up 1.5% at $86.09 a barrel, while the Brent oil futures for March traded 0.25% higher at $88.71 per barrel.