The Indian equity benchmarks, the BSE Sensex and the NSE Nifty, are set to open flat to lower on Wednesday, following mixed cues from Asian peers despite a strong finish on Wall Street overnight. The weak trends on SGX Nifty also indicated a gap-down opening for the domestic bourses, with SGX Nifty futures trading 45 points, or 0.29%, lower at 15,577 on the Singapore Stock Exchange at 8:05 AM. Shares of oil marketing companies will be in focus as international crude prices fell over 3% amid recession fear and weak demand outlook. The U.S. government’s push to cut fuel costs also triggered a sell-off in the market.
On Tuesday, the Indian share market ended higher for the second straight session, supported by broad-based buying amid firm cues from global peers. The ease in commodity prices and recent sell-off provided an opportunity for investors to buy beaten-down stocks. The 30-share BSE Sensex rallied 934 points, or 1.81%, to settle at 52,532, and the NSE Nifty surged 289 points, or 1.88%, to settle at 15,639. Barring Nestle India, all stocks in the Sensex pack closed in the green, led by Titan, SBI, TCS, HCL Technologies, Dr. Reddy’s, Tata Steel, Wipro, Infosys, ITC, and Tech Mahindra. Among sectors, the oil & gas index was the best performer with a 6% gain, followed by energy (4.95%), consumer durables (3.93%), metal (3.90%), realty (3.79%), and utilities (3.58%).
Stocks to watch
HDFC Bank: The private sector lender plans to double its network of branches in the next three to five years by adding 1,500 to 2,000 branches annually, says managing director and CEO Sashidhar Jagdishan.
PVR, INOX: The country’s biggest multiplex operators PVR and INOX have received approval from the Securities and Exchange Board of India (SEBI) for their merger, which was announced in March this year.
Hindustan Motors: CK Birla Group firm has agreed to sell its 'Contessa' brand to SG Corporate Mobility Pvt Ltd for an undisclosed sum.
Eureka Forbes: Water purifier maker on Tuesday said its managing director and CEO Marzin R Shroff will step down, effectively from August.
Hero MotoCorp: The auto major has launched Euro-5 compliant variants of its three globally popular products (Xpulse 200 4V motorcycle and Dash 110 and Dash 125 scooters), in Turkey.
Greenlam Industries: The company has signed a share subscription agreement with Smiti Holding and Trading Company for an allotment of up to 63.1 lakh equity shares at ₹309 per share.
Here are the key things investors should know before the market opens today:
Wall Street rebounds
In the overnight trade, all three major U.S. indices rallied over 2% to recover from last week's sharp losses, driven by a rally in growth-driven megacap stocks as well as energy shares as investors shrugged off global economic slowdown concerns. Investors also kept an eye on Federal Chairman Jerome Powell's testimony to the U.S. Senate Banking Committee on Wednesday for more clarity on future rate hikes and his latest views on the world’s largest economy. The Dow Jones Industrial Average gained 2.15%, the S&P 500 added 2.45%, and the Nasdaq Composite rose 2.51%.
Asian stocks mixed
Shares in the Asia-Pacific region traded mixed on Wednesday, despite positive closing on Wall Street overnight. Japan’s Nikkei 225 was down 0.15%, paring opening gains, while South Korea’s Kospi plunged 1.5%.
In Hong Kong, the Hang Seng index fell 0.45%, the Straits Times Index in Singapore shed 0.4%, and Australia’s ASX 200 traded flat.
Among others, Taiwan Weighted dropped 1%, while Indonesia’s Jakarta Composite gained 0.1%.
Markets in mainland China were flat in early trade, with the Shanghai Composite and the Shenzhen Component falling up to 0.1%.
Crude prices fall 3% on fears of recession
The price of Brent and U.S. crude dropped over 3% in early trade on Wednesday amid fears of the possible recession in the global economy in the wake of recent rate hikes and a weak demand outlook for the commodity. The prices also fell after U.S. President Joe Biden pushed to cut fuel prices to tame the energy inflation and ease pressure on major U.S. firms during the country's peak summer demand.
In Asian trading hours, the Brent oil for July delivery slumped 3.1% to $111.2 per barrel, while the U.S. West Texas Intermediate (WTI) crude July futures were down 3.5% at $105.7 a barrel.
FIIs continue selling spree
The foreign institutional investors (FIIs) continued their selling spree in the Indian equity market on June 21, while domestic institutional investors (DIIs) continued to support the market. As per the exchange data, FIIs net sold shares worth ₹2,701.21 crore, while DIIs net purchased shares worth ₹3,066.41 crore.