Soft opening seen for Sensex, Nifty; Infosys, Indian Oil, Wonderla Holidays, Minda Ind shares eyed

The Indian equity benchmarks, the BSE Sensex and the NSE Nifty, are set to fall in opening trade on Thursday, following negative trading in Asia and a mixed finish on Wall Street overnight. The soft trends on SGX Nifty also indicated a gap-down opening for the domestic bourses, with SGX Nifty futures trading 35 points, or 0.23%, lower at 15,742 levels on the Singapore Stock Exchange at 7:30 AM. Adding to it, continued fund outflows by foreign investors and recession woes may weigh on investors’ sentiment. The market is also likely to see some volatility as traders will roll over their position due to the expiration of their June futures and options (F&O) contracts today.

On Wednesday, the Indian share market ended lower, snapping a four-session gaining streak, as investors resorted to profit booking in IT, FMCG and banking stocks. The weak cues from global peers and persistent foreign fund outflows by foreign investors also dented market sentiments. The 30-share BSE Sensex closed 150 points, or 0.28%, lower at 53,027, with 20 of its stocks ending in the red. Similarly, the 50-share NSE Nifty fell 51 points, or 0.32%, to settle at 15,799. In the four-day rally to Tuesday, the Sensex surged 2.59% or 1,354 points, while the broader Nifty added 2.84% or 436 points. The top laggards on the BSE Sensex were Hindustan Unilever Ltd (HUL), IndusInd Bank, Axis Bank, Bajaj Finserv, Wipro, HCL Technologies, Titan, Kotak Mahindra Bank, and Bajaj Finance.

Stocks to watch

Infosys: The IT major has invested $10 million in a U.S.-based venture capital fund, The House Fund. The transaction is expected to be complete by June 30 this year.

Indian Oil Corporation: The state-owned oil company has received investment approval from its board to expand the capacity of Digboi refinery in Assam from 0.65 to 1 mmtpa along with associated facilities at an estimated cost of ₹740.20 crore.

Wonderla Holidays: The company has inked a pact with the Government of Odisha for leasing about 50 acres of land for the development of an amusement park project in Bhubaneswar.

Minda Industries: The company has acquired a 5.24% stake in German-based FRIWO AG, with an investment of 14.99 million euro.

Sterlite Technologies: The company will acquire the remaining 25% stake in Jiangsu Sterlite Tongguang Fiber Co. With this, JSTFCL will become a wholly owned subsidiary of Sterlite.

Home First Finance Company India: CARE has upgraded credit rating on long term bank facilities of the company from A+, to AA- with stable outlook.

Sun TV Network: The stock will be under the NSE F&O ban today as it has crossed 95% of the market-wide position limit.

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

Wall Street closed mixed

In the overnight trade, the U.S. indices ended mixed as the market struggled to find direction in absence of any major development on the domestic or global front. Traders awaited the beginning of the earnings season amid interest rate hikes and the threat of a global recession. The Dow Jones Industrial Average gained 0.27%, while the S&P 500 and the Nasdaq Composite fell 0.07% and 0.03%, respectively.

Asian stocks fall

Shares in the Asia-Pacific region were flashing in red in early deals on Thursday, following soft cues from Wall Street which finished mixed overnight. Besides, persistent concerns about recession, inflation and high oil prices also spooked investors’ appetite for riskier assets and prompted them to shift focus to safe-haven assets like gold and dollar.

Regional heavyweight Japan’s Nikkei 225 dropped 0.82%, South Korea’s Kospi fell 0.78%, and the Hang Seng index in Hong Kong slipped 0.35%. Similarly, Australia’s ASX 200 shed 0.6%, the Straits Times Index in Singapore traded marginally lower, while Taiwan Weighted index was the worst performer in the region with a 1.7% loss.

Bucking the trends, markets in mainland China were trading higher, with the Shanghai Composite and the Shenzhen Component rising 1.3% and 0.4%, respectively.

Crude prices steady

The price of Brent and U.S. crude was steady in early trade on Thursday as traders weighed the rise in U.S. gasoline and concerns about recession amid supply woes. The market sentiment was also spooked by worries over an economic slowdown and sanctions on the Russian oil supply. In Asian trading hours, the Brent oil for August delivery rose 0.16% to $112.6 per barrel, while the U.S. West Texas Intermediate (WTI) crude August futures were up 0.1% at $109.9 a barrel.

FIIs extend selling spree

The foreign institutional investors (FIIs) continued their selling streak in the Indian equity market on June 29, while domestic institutional investors (DIIs) continued to support the market. As per the exchange data, FIIs net sold shares worth ₹851.06 crore, while DIIs net purchased shares worth ₹847.46 crore.

FPIs to participate in exchange-traded commodity market

Securities and Exchange Board of India (SEBI) has allowed foreign portfolio investors (FPIs) to participate in the exchange-traded commodity derivatives market, a move that is likely to improve liquidity in the segment. The market regulator has discontinued the Eligible Foreign Entity (EFE) route, which required actual exposure to Indian physical commodities. As a result, foreign investors can participate in the commodity derivatives market with or without actual exposure to Indian physical commodities via the FPI route.

Govt deregulates sale of domestically crude oil

The Union Cabinet on Wednesday approved a proposal to allow upstream oil companies to sell crude oil to any company in the domestic market, a move that is likely to boost the exploration and production in the energy sector. The government has decided to cease the allocation of crude oil and condensate with effect from October 1, 2022. This decision will ensure marketing freedom for all exploration and production operators.