Soft opening seen for Sensex, Nifty; Tech Mahindra, L&T, Bajaj Auto, Tata Power shares in focus

The equity benchmarks, the BSE Sensex and the NSE Nifty, are expected to open flat to lower on Tuesday, tracking mixed cues from global peers. Shares in Asia were trading mostly higher, barring Japan, while Wall Street lost ground ahead to the Federal Reserve meeting this week. The muted trends on SGX Nifty also indicated a soft opening for the domestic bourses, with SGX Nifty futures trading 23 points, or 0.14%, lower at 16,595 levels on the Singapore Stock Exchange at 8:10 AM. Investors will keep an eye on the rupee-dollar trend, Brent crude oil price, and foreign funds movement. Among individual stocks, Larsen & Toubro, Bajaj Finserv, Bajaj Auto, Asian Paints, and Tata Power Company, will be in focus ahead of their June quarter results.

On Monday, the domestic bourses closed lower, snapping six sessions gaining streak, amid profit booking in oil & gas, automobile, and telecom stocks. The 30-share Sensex ended 306 points, or 0.55%, lower at 55,766.22, dragged down by index heavyweight Reliance Industries. The NSE Nifty fell 88 points, or 0.53%, to settle at 16,631. Among the Sensex constituents, Mahindra & Mahindra fell the most by 3.80%, followed by RIL, Maruti Suzuki India, Kotak Mahindra Bank, UltraTech Cement, Tech Mahindra, and Nestle, among others. On the flip side, Tata Steel, IndusInd Bank, Asian Paints, HCL Technologies, Wipro and NTPC were among the gainers. In the broader market, the BSE smallcap ended marginally lower, while the midcap index ended a tad higher. On the sectoral front, the auto index was the worst performer, followed by energy, telecom, oil & gas, healthcare, and realty.

Stocks to watch

Axis Bank: The private lender reported a 91% year-on-year (YoY) jump in net profit to ₹4,125 crore in the quarter ended June 2022. The net interest income (NII) grew 21% YoY to ₹9,384 crore, while the net interest margin (NIM) for the quarter stood at 3.6%, up 14 basis points on yearly basis.

Tech Mahindra: The software services firm saw its net profit dropping by 16.4% YoY to ₹1,132 crore in the first quarter of the financial year 2022-23 from ₹1,353.20 crore in the year-ago period. Revenue jumped 24.6% to ₹12,708 crore compared with ₹10,197.60 crore in the corresponding quarter last year.

Tata Steel: The country’s largest steel maker has reported around 13% YoY fall in consolidated profit at ₹7,765 crore for the quarter ended June 2022, dented by higher input cost and tax expenses. Revenue, however, rose 18.6% YoY to ₹63,430 crore during the quarter under review.

Glaxosmithkline Pharmaceuticals: The pharma company posted a 8.3% YoY growth in profit at ₹116.23 crore for the quarter ended June 2022. Revenue rose by 3.7% to ₹745.10 crore during the quarter.

Lupin: The pharma major has received approval from US FDA for its abbreviated new drug application (ANDA), Azilsartan Medoxomil tablets, to market the drug in the U.S.

Sun Pharmaceutical Industries: Life Insurance Corporation of India has sold 2% stake in the company via open market transactions during May 17-July 22, 2022. With this, LIC's holding in the company reduced to 5.02%, from 7.02% earlier.

Indiabulls Housing Finance: The stock will be under the NSE F&O ban today as the security has breached 95% of the market-wide position limit.

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

Wall Street ends mixed ahead of Fed meeting

In the overnight trade, U.S. stocks ended on a mixed note as caution prevailed in the market ahead of policy decision by the Federal Reserve. The market sentiment was also dented by downbeat earnings outlook by big players, with Walmart cutting its profit outlook, citing double-digit food inflation and its impact on consumer spending. There is wide speculation in the market that the U.S. central bank may raise the rate by at least 75 bps this week after the bigger-than-expected rise in the consumer price index (CPI), which surged 9.1% year-on-year in June. The Dow Jones Industrial Average ended 0.3% higher, the S&P 500 added 0.1%, and the Nasdaq Composite settled 0.4% lower.

Barring Japan, Asian stocks rise

Shares in the Asia-Pacific region were trading mostly higher on Tuesday, barring Japan and Taiwan, following a soft closing on Wall Street overnight amid concerns that the U.S. Federal Reserve would increase interest rates in its policy decision on Thursday. The persistent concern about the global economic slowdown in the face of the Covid-19 resurgence in China and rate hikes by central banks globally also weighed on investors’ sentiments.

Regional heavyweight Japan’s Nikkei 225 dropped nearly 0.1% after its government lowered its economic growth forecast for this fiscal year, owing to weak global economy, Russia-Ukraine war, and the Covid-19 pandemic. Taiwan Weighted Index tumbled nearly 1%, emerging as the worst performer in the regional market.

South Korea’s Kospi rose 0.2%, the Straits Times in Singapore was up 0.1%, and the Jakarta Composite in Indonesia traded gained 0.4%.

Meanwhile, the Hang Seng index in Hong Kong added 0.8% and Australia’s ASX 200 traded flat with positive bias.

Markets in mainland China were up, with the Shanghai Composite and the Shenzhen Component rising by 0.5% and 0.7%, respectively.

Crude prices edge higher

The price of Brent and U.S. crude edged higher in early trade on Tuesday amid reports that Russia's cut in natural gas supply to Europe could prompt a shift to crude, boosting fuel demand. However, fear of recession in the backdrop of continued rate hikes by central banks globally raised concerns about future demand outlook. In early Asian trading hours, the Brent oil for September delivery rose 1.3% to $101.5 per barrel, while the U.S. West Texas Intermediate (WTI) crude August futures were up 1% at $97.75 a barrel.

FIIs, DIIs net sellers

The foreign institutional investors (FIIs) and domestic institutional investors (DIIs) turned net sellers in the Indian equities on July 25. As per the exchange data, FIIs offloaded shares worth ₹844.78 crore, while DIIs net sold shares worth ₹72.26 crore.

Corporate results

Larsen & Toubro, Bajaj Finserv, Bajaj Auto, Asian Paints, Tata Power Company, and Union Bank of India will release their June quarter results today.

Among others, Aditya Birla Sun Life AMC, Apollo Pipes, EIH Associated Hotels, EPL, Ethos, Greenlam Industries, KEI Industries, Mahindra EPC Irrigation, PNB Gilts, Ramco Systems, Symphony, Sanofi India, Shoppers Stop, SIS, South Indian Bank, TTK Healthcare, United Spirits, Ujjivan Small Finance Bank, and UTI Asset Management Company will declare their quarterly results on July 26.