Indian equity benchmarks are set to open higher on Wednesday, following gains in Asian peers. The positive trends on SGX Nifty also indicated a gap-up opening for the domestic bourses, with SGX Nifty futures trading 89 points, or 0.52%, higher at 17,192 on the Singapore Stock Exchange at 8:20 AM.
Investors will keep a close eye on the Russia-Ukraine crisis, which may inject volatility in the market. The trend in crude prices and foreign fund flows will also set the tone for the market.
"The major impact of the Ukraine crisis in India is the implications of crude at $97. If crude sustains at around these high levels, inflation in India is sure to go up, forcing the RBI to revise its FY 23 inflation target upwards and signal withdrawal from the accommodative monetary stance. This would be negative from the growth and earnings perspective,” says V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“Higher crude prices are negative for tyre, paints and FMCG segments. Financials, particularly high quality banks, have valuation comfort. IT sector is likely to exhibit resilience thanks to good earnings visibility," Vijayakumar added.
On Tuesday, the Indian equity benchmarks closed lower for the fifth straight session amid a worsening situation in Ukraine after Russian President Vladimir Putin recognised two breakaway regions in eastern Ukraine — Donetsk and Luhansk — as an independent. The BSE Sensex dropped nearly 1,300 points intraday but reversed most of the losses to settle 383 points, or 0.6%, lower at 57,300.6. In a similar trend, the Nifty50 index rebounded 248 points from intraday low to settle at 17,092, down 114 points or 0.6%. The market witnessed broad-based selling with all sectoral indices closing in red, barring the power index. The top losers on the Sensex pack were Tata Steel, Tata Consultancy Services, State Bank of India, Dr. Reddy's Laboratories and IndusInd Bank.
Stocks to watch
Reliance Industries: Market regulator SEBI has issued a show-cause notice to Reliance Industries for alleged violation of 'Principles for fair disclosure' while handling unpublished price sensitive information, according to a disclosure by Data Infrastructure Trust, a joint venture between Reliance and private equity firm Brookfield .
Sun Pharma: The pharma company’s subsidiary Taro Pharmaceuticals has signed a definitive agreement to acquire The Proactiv Company from Galderma for $90 million.
Hero MotoCorp, BPCL: The auto major has teamed up with Bharat Petroleum Corporation Ltd (BPLC) to set up charging infrastructure for electric two-wheelers across the country.
Wipro: The IT company’s corporate investment arm, Wipro Ventures, has invested in US-based startup, vFunction.
Mahindra & Mahindra Financial Services: The NBFC firm has raised ₹300 crore by issuing bonds on a private placement basis. The company issued 3,000 secured redeemable non-convertible debentures (NCDs) of a face value of ₹10 lakh each, aggregating to ₹300 crore.
Zee Entertainment Enterprises: The media firm has filed an application in the Mumbai bench of the National Company Law Tribunal (NCLT) to dismiss IndusInd Bank's insolvency petition against the company.
SJVN: The government-owned power company signed papers to raise ₹6,333.40 crore loan from a consortium of banks from India and Nepal for funding of its Arun-3 power project in Nepal.
Dilip Buildcon: The construction company has emerged as L-1 bidder for a new HAM project under Raipur-Visakhapatnam in Chhattisgarh. The contract is worth ₹1,141 crore.
Stocks under F&O ban: Three stocks – Escorts, Indiabulls Housing Finance, and Punjab National Bank – will be under the F&O ban today. The ban is imposed on companies in which the security breaches 95% of the market-wide position limit.
Here are the key things investors should know before the market opens today:
Wall Street declines on Ukraine woes
In the overnight trade, all three major U.S. stocks closed lower as the Ukraine-Russia crisis injected volatility in the market. In a fresh development, U.S. President Joe Biden announced the first wave of sanctions against Russia after Moscow's recognised two separatist regions - Donetsk and Luhansk - as independent entities.
On Wall Street, the Dow Jones Industrial Average dropped 1.42%, the S&P 500 fell 1.01%, and the Nasdaq Composite ended 1.23% lower.
Asian markets edge higher
Shares in the Asia-Pacific region traded mostly higher in early hours on Wednesday amid bargain hunting after recent sell-off. Investors kept an eye on international responses against Russia’s move to invade Ukraine.
Mainland Chinese shares were trading higher in early deals, with the Shenzhen component and the Shanghai composite rising 0.9% and 0.2%, respectively.
The Hang Seng index in Hong Kong gained 0.3% after falling more than 2% in the previous session. Australia’s ASX 200 climbed 0.4%, South Korea’s KOSPI gained 0.3%. The Straits Times Index in Singapore shed 0.4%.
Markets in Japan were closed for a holiday on Wednesday.
Brent crude surges amid fear of Russia-Ukraine war
Global benchmark Brent crude topped $97 in early trade on Wednesday on fear of harsh sanctions against Russia after President Vladimir Putin ordered forces into eastern Ukraine's two breakaway regions. U.S. President Joe Biden on Tuesday announced comprehensive sanctions on Russia’s sovereign debt after Moscow began “an invasion” of Ukraine.
During the early Asian trading hours on Wednesday, the U.S. West Texas Intermediate (WTI) crude futures surged 1.41% to $92.35 a barrel, while the Brent oil futures rose 0.2% to $97.03 per barrel.
Gold price edges higher on Ukraine crisis
Gold prices continued to move higher as sharp sell-off in equities prompted investors to shift focus to safer assets such as gold. The increasing risk of war in eastern Ukraine region pushed yellow metal prices higher. Spot gold was up 0.08% at $1,900.17 per ounce at the time of reporting.
FIIs remain net sellers, DIIs net buyers
Foreign institutional investors (FIIs) remained net sellers in the Indian equity market on February 22, while domestic institutional investors (DIIs) emerged as net buyers. As per the data available on the NSE, FIIs sold shares worth ₹3,245.5 crore, while DIIs net purchased shares worth ₹4,108.6 crore.
