Soft opening seen for Sensex, Nifty; L&T, Lupin, BHEL, PNB, TVS Motor shares in focus

Indian equity benchmarks are likely to open on a muted note on Friday, following mixed cues from global peers. The subdued trends on SGX Nifty also indicated a soft opening for the domestic bourses, with SGX Nifty futures trading 17 points, or 0.1%, lower at 17,150 on the Singapore Stock Exchange at 8:25 AM.

On Thursday, the benchmark indices witnessed a massive sell-off, with the BSE Sensex declining as much as 1,418 points, or 2.45%, intraday after the U.S. Federal Reserve in its policy meeting indicated interest rates hike by March 2022. However, the market staged a smart recovery to reverse half of the early losses as traders stepped in to buy beaten-down stocks. The BSE Sensex closed 581 points or 1% lower at 57,277, and the NSE Nifty ended down by 168 points, or 0.97%, at 17,110. On the sectoral front, bank and PSU indices were among top performers, while IT and Tech emerged as top laggards. The top gainers on the BSE Sensex pack were Axis Bank, State Bank of India, Maruti Suzuki India, Kotak Mahindra Bank, and Sun Pharmaceutical Industries.

Stocks to focus

Lupin: The pharma major said in an exchange filing that its US-based unit has signed a deal with Exeltis Inc to promote Solosec, a drug used to treat bacterial vaginosis in women.

Bharat Heavy Electricals Ltd (BHEL): The state-owned company reported a consolidated net profit of ₹27.02 crore for the October-December quarter of 2021, compared to a net loss of ₹217.86 crore in the year-ago period.

Canara Bank: Shares of the public sector lender reported strong earnings for December quarter of 2021. The bank’s net profit surged 115.8% year-on-year to ₹1,502 crore for the third quarter ended December 2021, driven by steady growth in net interest income and drop in provisions.

Future Group companies: Shares of the Kishore Biyani-led Future Group companies will be in focus after Future Enterprises announced to sell its 25% equity stake in Future Generali India Insurance Company (FGIICL) to its JV partner Generali for a cash consideration of ₹1,253 crore. Future Group has decided to exit the insurance business and monetise its assets to pare debts. FGIICL, which operates in the general insurance sector, is a joint venture between Future Enterprises Ltd (FEL) and Generali Participations Netherlands NV (Generali).

TVS Motor Company: The two-wheeler maker has acquired a 75% stake in Switzerland's largest e-bike player, Swiss E-Mobility Group AG (SEMG), for $100 million.

Punjab National Bank: The PSU lender reported a two-fold rise net profit to ₹1,126.78 crore for the third quarter ended December. The country's second-largest public sector bank had posted a net profit of ₹506.03 crore in the year-ago period.

RBL Bank: The private sector lender reported a 17.20% fall in net profit at ₹121.61 crore for Q3FY22, weighed down by slower loan growth and surge in operating expenses.

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

Sell-off continues at Wall Street

In the overnight trade, volatility continued at Wall Street following the release of strong GDP data which further fuelled fear about the sooner-than-expected rise in interest rates. The market sentiment was also dented by a sharp sell-off in Elon Musk-led Tesla, which fell more than 11%, dragging the tech sector lower.

Paring early gains, the benchmark S&P 500 dropped 0.5%, the blue-chip Dow Jones index slipped 0.02%, and the tech-heavy Nasdaq Composite settled 1.4% lower.

As per data released by the US Department of Commerce, the fourth-quarter gross domestic product (GDP) grew by 6.9% in the final three months of 2021. Annually, the US economy rose 5.7%, which was the fastest pace in the last four decades.

Asian shares rebound on strong U.S. GDP data

Shares in the Asia-Pacific region rebounded on Friday as U.S. Treasury yields retreated after data showed that the U.S. economy grew at a strong pace during the fourth quarter ended December 2021. However, strong volatility at Wall Street overnight also weighed on investors’ sentiments.

The Japanese stock market rebounded strongly, with the benchmark Nikkei 225 rising 2.1% in early trade. South Korea’s KOSPI also surged 0.8% after falling more than 3% in the previous session.

Australia’s ASX 200 index surged nearly 2%, the Straits Times Index in Singapore rose 0.25%, and Indonesia’s Jakarta Composite gained 0.2% in early deals.

Bucking the trend, the Hang Seng index in Hong Kong fell 1%, while Thailand’s SET Composite dropped 0.56%.

In mainland China, the Shenzhen component and the Shanghai composite fell 0.5% and 0.1%, respectively.

Brent crude prices retreat from 7-year high

Global benchmark Brent crude dropped 0.2% to $89.77 a barrel in overnight trade, while the U.S. West Texas Intermediate (WTI) ended 74 cents lower at $86.61 per barrel in a volatile session. Brent crude hit a seven-year high above $90 a barrel in the previous session on supply concerns as investors feared that tensions between Russian and Ukraine may lead to further supply disruptions in an already-tight market.

During the early Asian trading hours, the U.S. WTI crude futures rose 0.65% at $87.17 a barrel, while the Brent oil futures dropped 0.12% to $88.58 per barrel.

Corporate earnings

The big companies that will announce their December quarter results today include Larsen & Toubro, Dr Reddy’s Labs, Kotak Mahindra Bank, Vedanta, Britannia Industries, Tata Coffee, United Breweries, and others.

Among others, Aptus Value Housing Finance, Arvind SmartSpaces, Asahi India Glass, Atul, AU Small Finance Bank, Bajaj Healthcare, Bharat Electronics, Blue Dart Express, CARE Ratings, Central Bank of India, Chambal Fertilisers, Chemplast Sanmar, Crompton Greaves Consumer Electricals, Deepak Fertilisers, Dixon Technologies, Equitas Small Finance Bank, Happiest Minds Technologies, 3i Infotech, Karnataka Bank, Marico, Max Financial Services, Info Edge, Oberoi Realty, Suzlon Energy, UTI Asset Management Company, and Zenotech Laboratories, will also release their earnings report on January 28.

FIIs remain net sellers, DIIs turn net buyers

Foreign institutional investors (FIIs) continued to remain net sellers in the Indian equity market on January 27, while domestic institutional investors (DIIs) turned net buyers. As per the data available on the NSE, FIIs sold shares worth ₹6,266.7 crore, while DIIs net bought shares worth ₹2,881.3 crore.