The domestic benchmarks, the BSE Sensex and the NSE Nifty, are set to start the week on a positive note, following firm cues from Asian peers and a strong finish on Wall Street on Friday. The global equities rallied as U.S. rate bets eased after retail sales data beat forecasts, indicating the economy’s resiliency. The strong trends on SGX Nifty also indicated a gap-up opening for the domestic bourses, with SGX Nifty futures trading 180 points, or 1.12%, higher at 16,220 levels on the Singapore Stock Exchange at 8:10 AM. The key factors that will drive the market this week include corporate results, foreign fund movement, trends in the rupee and crude oil. On the global front, the European Central Bank (ECB) and Bank of Japan will announce their monetary policy decisions this week after rate hikes by Canada, New Zealand, Chile, South Korea and the Philippines last week.
Last week, the Indian share market ended lower, snapping its three-week gaining streak, as a record surge in U.S. inflation and the Covid-19 lockdown in China raised recession fear. The continued slump in Indian rupee and disappointing earnings by IT major TCS and HCL Technologies also weighed on market sentiments. The benchmark BSE Sensex closed 721 points, or 1.32%, down at 53,761 during the week ended July 15, while the NSE Nifty index settled 171 points, or 1.06%, lower at 16,049. On Friday, the benchmark indices snapped four days of losing streak and ended higher, with Sensex gaining 344 points to close at 53,760, and Nifty riring 111 points to 16,049. The top gainers on the BSE Sensex pack were Hindustan Unilever, Titan, Maruti, Larsen & Toubro, HDFC, Mahindra & Mahindra, Nestle and Bharti Airtel.
Stocks to watch
HDFC Bank: The private sector lender on Saturday reported a 19% YoY rise in its June quarter net profit at ₹9,196 crore amid broad-based growth across all verticals. The net interest income, the difference between the interest earned and the interest expended, climbed 14.5% to ₹19,481.4 crore.
Vedanta: The mining major will seek shareholder approval for related-party transactions worth ₹8,661 crore for the current financial year (FY23) in the company's annual general meeting (AGM), to be held on August 10.
Hindustan Zinc: The company, a subsidiary of Vedanta, plans to expand the production of zinc alloys and has received nod to set up a 30 kilo tonnes per annum plant (KTPA), company's CEO Arun Misra said in the company's annual report for 2021-22.
Tata Steel: The country’s largest steel maker has planned capital expenditure (capex) of ₹12,000 crore for its India and Europe operations during the current financial year, its CEO T V Narendran told a media agency.
Vodafone Idea: The cash-strapped telecom operator has received its shareholder's approval to allot equities worth ₹436.21 crore to its promoter entity, the Vodafone Group.
TVS Motor Company: The auto majors has said its board will consider raising funds through debentures in its meeting later this month.
Jindal Steel and Power Limited (JSPL): The company has posted a multifold jump in consolidated net profit to ₹2,770.88 crore for the quarter ended June, 2022, driven by higher income. The total income rose to ₹13,069.17 crore from ₹10,643.17 crore a year ago.
YES Bank: The private lender has signed a binding term sheet with JC Flowers Asset Reconstruction (ARC) for the proposed sale of an identified stressed loan portfolio of the bank aggregating to ₹48,000 crore.
Here are the key things investors should know before the market opens today:
Wall Street surges on solid retail sales data
On Friday, U.S. stocks ended higher as dollar and bond yields fell amid expectations of a less aggressive policy stance by the Federal Reserve in its meeting later this month. The solid retail sales data and decent earnings by Citigroup also boosted market sentiments. However, fear of an economic downturn with a steep rise in interest rate to curb boiling inflation limited the market’s gain. The Dow Jones Industrial Average rose 1.9%, while the S&P 500 added 1.6%, and the Nasdaq Composite surged 1.4%.
Asian stocks rise as recession fears ease
Shares in the Asia-Pacific region were trading in positive terrain on Monday, tracking a solid finish on Wall Street on Friday as expectations of a 100 basis point (bps) interest rate hike by the U.S. central bank in July receded following robust retail sales data. Retail sales rose 1% in June as Americans spent more on gasoline and other goods amid rising inflation.
Regional heavyweight Japan’s Nikkei 225 was up 0.5% in early trade, while South Korea’s Kospi jumped 1.5%, emerging as the best performer in the regional market.
The Hang Seng index in Hong Kong gained 0.5%, Australia’s ASX 200 added 0.4%, and Straits Times in Singapore climbed 0.6%. Among others, Taiwan Weighted and Jakarta Composite in Indonesia rose 0.9% and 0.5%, respectively.
Markets in mainland China were mixed, with the Shanghai Composite gained 0.4%, while the Shenzhen Component fell by 0.4%.
Oil prices steady at $100
The price of Brent and U.S. crude were steady in early trade on Monday, hovering around $100 per barrel amid hope of a production boost after U.S. President Joe Biden’s visit to Saudi Arabia. The oil prices have fallen significantly in the last one month amid fear of recession and weak demand outlook in the backdrop of Covid restriction in China, the world’s largest oil consumer.
In Asian trading hours on Monday, the Brent oil for September delivery was up 0.1% at $101.25 per barrel, while the U.S. West Texas Intermediate (WTI) crude August futures were down 0.2% at $94.38 a barrel.
FIIs continue selling spree
The foreign institutional investors (FIIs) continued their selling spree in the Indian equity market on July 15, while domestic institutional investors (DIIs) continued to support the market. As per the exchange data, FIIs net sold shares worth ₹1,649.36 crore, while DIIs net purchased shares worth ₹1,059.46 crore.
The companies which will release their June quarter earnings include Nelco, Bank of Maharashtra, HeidelbergCement India, Alok Industries, Bhansali Engineering Polymers, Ganesh Housing Corporation, Onward Technologies, Sudal Industries, and Tanfac Industries.