Sensex, Nifty likely to stay in bear grip; RIL, HUL, Biocon, JSW Steel in focus

Indian equity benchmarks are expected to continue their losing streak on Friday, following broadly negative cues from Asian stocks as well as Wall Street, as traders remain concerned about a continued spike in crude oil prices and looming interest rate hikes by the U.S. Federal Reserve. The negative trends on SGX Nifty also indicated a gap-down opening for the Indian equities, with SGX Nifty futures trading 117 points, or 0.66%, lower at 17,683 on the Singapore Stock Exchange at 8:10 AM.

Extending loss for the third consecutive session, the Indian share market closed lower on Thursday, undermining firm cues from Asian peers which ended mostly higher after China lowered its mortgage reference rate. The BSE Sensex dropped 634 points, or 1.06%, to 59,464, while the NSE Nifty plunged 181 points, or 1.01%, to 17,757. On the sectoral front, IT and tech stocks emerged as top laggards, while power and metal stocks gained the most. Among the individual stocks, Bajaj Finserv, Infosys, Tata Consultancy Services (TCS), Sun Pharmaceutical Industries, and Hindustan Unilever Ltd. (HUL) were among top five losers on the BSE.

Stocks to watch

Reliance Industries: Mukesh Ambani-led oil-to-telecom conglomerate is expected to post a strong set of numbers for the December quarter when it releases its earnings today. The company is likely to report 10-25% year-on-year (YoY) growth in profit and 45-70% rise in revenues, according to market analysts.

Hindustan Unilever: The FMCG major on Thursday reported a 17% rise in net profit at ₹2,243 crore in Q3 FY22 against ₹1,921 crore in Q3 FY21. The revenue rose to ₹13,092 crore from ₹11,862 crore in the same period last year.

Asian Paints: The paint major posted a 18% drop in Q3 net profit at ₹1,015.7 crore as higher input costs impacted margins.

Biocon: The biopharma company reported a 17.7% YoY surge in Q3 FY22 net profit at ₹219.60 crore, while total income rose 17.9% to ₹2,222.50 crore.

Surya Roshni: The company has received orders worth ₹123.17 crore for ERW line pipe (API SL GRADE) and MS bare pipe 3LPE coated.

Bank of Maharashtra (BoM): The state-owned lender’s net profit more than doubled to ₹325 crore on rise in net interest income, when compared with ₹154 crore in Q3 FY21.

Natco Pharma: The drug maker said it has inked a license agreement with the Medicines Patent Pool, Switzerland to manufacture and sell Molnupiravir capsules 200 mg used for treatment of COVID-19 patients.

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

U.S. stocks extend fall amid Fed tightening fears

In the overnight trade, Wall Street closed lower for the third straight session amid looming fear that the Federal Reserve will aggressively move to raise rates this year. Investors kept a close eye on the U.S. central bank's policy meeting next week to see how it will tame inflation. Adding to it, the record rise in crude oil prices and bond yields also raised concerns about inflation and higher interest rates.

On Wall Street, the Dow Jones Industrial Average fell 0.89%, the S&P 500 dropped 1.10% and the NASDAQ Composite ended 1.30% lower.

Asian shares follow Wall Street lower

Shares in the Asia-Pacific region opened lower on Friday, following a negative finish at Wall Street overnight, as concern over the U.S. Federal Reserve's policy tightening and weaker-than-expected macro and earnings data took a toll on the market.

The Japanese stock market fell sharply in early trade, with the benchmark Nikkei 225 dropping 1.4% following negative cues from Wall Street. The concerns about the fast spread of the coronavirus omicron variant in the country also weighed on investor sentiments. South Korea’s KOSPI fell 0.85% in early deals.

China mainland shares also traded lower, with the Shenzhen component and the Shanghai composite falling 0.7% and 0.6%, respectively.

The Hang Seng index in Hong Kong slipped 0.2%, after surging more than 3% in the previous session.

In a similar trend, Indonesia’s Jakarta Composite, Thailand’s SET Composite, and the Straits Times Index in Singapore edged lower in early trade.

Corporate earnings

The big companies that will announce their December quarter results today include Reliance Industries, IDBI Bank, JSW Steel, HDFC Life Insurance Company, Vodafone Idea, Hindustan Zinc, SBI Life Insurance Company, and Bandhan Bank.

Among others, Gland Pharma, Polycab India, Vodafone Idea, PVR, Kajaria Ceramics, L&T Finance, Sangam (India), Seshasayee Paper & Boards, Sharda Cropchem, Sportking India, Vakrangee, Vardhman Textiles, and Welcure Drugs & Pharmaceuticals will also release their earnings report on January 21.

FIIs remain net sellers, DIIs turn net buyers

Foreign institutional investors (FIIs) continued to remain net sellers in the Indian equity market on January 20, while domestic institutional investors (DIIs) turned net buyers. As per the data available on the NSE, FIIs net sold shares worth ₹4,679.8 crore, while DIIs net bought shares worth ₹ 769.26 crore.