Gap-up opening seen for Sensex, Nifty; Dabur, SBI, Future Retail, GMR Infra, LIC IPO in focus

Indian benchmark indices, the BSE Sensex and the NSE Nifty, are poised to open higher on Thursday, following strong cues from global peers after the Federal Reserve chairman Jerome Powell downplayed larger rate hikes anytime soon. Shares in the Asia-Pacific region rose in opening trade, following a strong finish on Wall Street overnight after the US central bank increased U.S. interest rates by an expected 0.5% to curb inflation. The positive trends on SGX Nifty indicated a strong opening for the domestic bourses, with SGX Nifty futures trading 174 points, or 1.04%, higher at 16,863 on the Singapore Stock Exchange at 8:00 AM. Investors will keep a close on the bidding of LIC IPO, which was subscribed 67% on day one.

On Wednesday, the domestic bourses ended lower for the third consecutive session on Wednesday, with the Sensex and Nifty falling over 2% each after the RBI hiked interest rate by 40 basis points to 4.40% in a bid to contain inflation. The surprise decision was taken in an unscheduled meeting of the Monetary Policy Committee (MPC) where all six members unanimously voted for a rate hike while maintaining the accommodative stance. The BSE Sensex plunged 1,307 points to close at 55,669, and the NSE Nifty dived 391 points to finish at 16,677.

Stocks to focus:

Future Retail: The debt-laden company, which faces insolvency petition by its lenders, informed exchanges that its managing director Rakesh Biyani has stepped down while officials, including the company secretary of the debt-ridden firm, have tendered resignations.

State Bank of India (SBI): The country’s largest lender is reportedly planning to raise long term funds up to $2 billion through overseas bonds in the current financial year (FY23).

Adani Green Energy: The Gautam Adani-led renewable energy company reported 16% year-on-year growth in net profit at ₹121 crore in the quarter ended March 2022, as compared to ₹104 crore in the year-ago period. The company’s total income rose to ₹1,587 crore in the fourth quarter, from ₹1,082 crore in the same period a year ago.

GMR Infrastructure: The Ministry of Civil Aviation has granted rights to the GMR Group to operate the Hyderabad international airport for 30 more years till March 22, 2038. The airport was inaugurated on March 23, 2008.

Indiabulls Housing Finance: The Bombay High Court on Wednesday quashed a case of cheating and criminal breach of trust filed against the company, saying that the FIR lodged in April 2021 by the Palghar police was an abuse of the process of law.

Castrol India: Lubricant maker saw its profit after tax (PAT) declining by 6% to ₹229 crore for the first quarter ended March 31, 2022, from ₹244 crore in the January-March period of last year. Revenue from operations, however, climbed to ₹1,236 crore as against ₹1,139 crore in the year-ago period.

Tata Consumer Products: The Tata group firm on Wednesday reported an over three-fold jump in consolidated net profit at ₹239.05 crore for the fourth quarter ended March. The company had posted a net profit of ₹74.35 crore in the January-March quarter a year ago.

Havells India: The Consumer electrical goods maker posted a 16% rise in its consolidated net profit to ₹352.48 crore for the fourth quarter ended in March 2022, compared with ₹303.83 crore in the January-March quarter a year ago. Its revenue from operations rose 32.55% YoY to ₹4,426.26 crore during the period under review.

ABB India: The company on Wednesday reported over two-fold jump in its net profit to ₹370 crore in the March quarter of 2022, as against ₹151 crore in the same period last year. Total revenue increased to ₹1,968 crore, from ₹1,629 crore in the March quarter of 2021.

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

Wall Street cheers Fed’s rate hike

In the overnight trade, all three major U.S. indices ended higher with solid gains after the Federal Reserve raised interest rate by half a percentage point, in line with market expectations. The central bank has also decided to wind up its $9 trillion asset portfolio next month in a bid to contain rising inflation. The market sentiment was also lifted after Fed Chair Jerome Powell downplayed the chances of any larger rate hikes. The Dow Jones Industrial Average ended 2.81% higher and the S&P 500 rallied 2.99%. In a similar trend, the tech-heavy Nasdaq Composite surged 3.19%.

Asian stocks follow Wall Street higher

Shares in the Asia-Pacific region were flashing in green in early trade on Thursday, following strong cues from Wall Street after the Federal Reserve delivered a widely expected interest rate hike. Markets in Japan and South Korea are closed for a holiday on Thursday.

Regional heavyweight Hong Kong’s Hang Seng index rallied 1.15% in early deals, Singapore’s Straits Times inched up 0.1%, and Australia’s ASX 200 rose 0.6%. Similarly, Taiwan’s Weighted index climbed 1%.

Mainland Chinese stocks were mixed as they resumed trading after days of holidays. The Shanghai composite rose 0.7% while the Shenzhen component dropped 0.3%.

Oil prices continue to rise

The prices of international crude oil continued to gain amid supply worries as the European Union plans to impose sanctions on Russian oil imports, in line with the United States, Canada, and the United Kingdom. The market sentiment was also dented after OPEC+ countries stick to their existing deal to increase production targets marginally amid demand concerns due to lockdown in China.

In Asian trading hours on Thursday, the Brent oil for July delivery climbed 0.27% to $110.43 per barrel, while the U.S. West Texas Intermediate (WTI) crude futures rose 0.15% to $107.95 a barrel.

FIIs remain net sellers, DIIs net buyers

The foreign institutional investors (FIIs) remained net sellers in the Indian equity market on May 4, while domestic institutional investors (DIIs) continued to support the market. As per the exchange data, FIIs sold shares worth ₹3,288.18 crore, while DIIs net purchased shares worth ₹1,338 crore.

LIC IPO garners strong response on day 1

The highly-anticipated initial public offering (IPO) of Life Insurance Corporation (LIC) of India received an overwhelming response from investors on the first day of bidding. The offer was subscribed 67% on May 4, with quota reserved for policyholders subscribing 1.99 times and the employee portion was booked 117%. The retail investor's segment was subscribed 60%, non-institutional investors quota received 27% bid and the qualified institutional buyers’ portion was subscribed 33%.

The IPO, which is touted to be the country’s largest-ever public issue, will see the government selling 3.5% stake in the insurer, lower than the earlier offer of 5%, comprising 22.13 crore shares of ₹10 face value. The government is expected to raise around ₹21,000 crore through the issue at the upper end of the price band of ₹902-949 per share.

Corporate earnings

The major companies that are slated to release their earnings numbers today include Adani Power, Adani Transmission, Dabur India, TVS Motor, Exide Industries Marico, MMTC, and CEAT. Among others, AAVAS Financiers, Aptus Value Housing Finance India, Blue Star, Blue Dart Express, Borosil Renewables, Computer Age Management Services, Cholamandalam Investment and Finance Company, DCM Shriram, Firstsource Solutions, Intellect Design Arena, Jindal Stainless (Hisar), Punjab Alkalies & Chemicals, Procter & Gamble Health, PNB Gilts, Quick Heal Technologies, Sona BLW Precision Forgings, and Tribhovandas Bhimji Zaveri, will also unveil their March quarter results on May 5.