Sensex, Nifty to open lower; ONGC, Zomato, Hindalco, MRF, M&M shares in focus

Indian equity benchmarks are poised to open lower on Friday as global equity markets went on a downward spiral after the U.S. inflation hit a 40-year high in January, stoking fears that the Federal Reserve will raise interest rate soon. The negative trends from the SGX Nifty futures also signalled a gap-down opening for domestic bourses. At 7:50 AM, the Nifty futures were trading 182 points, or 1.03%, lower at 17,424 on the Singapore Stock Exchange.

On Thursday, the benchmark indices ended higher for the third straight session as traders cheered the Reserve Bank of India’s decision to keep the key rates unchanged. The RBI’s monetary policy committee (MPC) maintained the status quo on policy rates for the tenth time in a row with an ‘accommodative’ stance to help revive the economy. The BSE Sensex closed 460 points, or 0.79%, higher at 58,926, and the NSE Nifty ended 142 points, or 0.81%, higher at 17,606. On the sectoral front, all sectoral indices, barring capital goods, closed in positive terrain, led by power and metal indices. The top five gainers on the BSE Sensex pack were Tata Steel, Infosys, HDFC Bank, Housing Development Finance Corporation and Kotak Mahindra Bank.

Shares to focus

Hero MotoCorp: The country’s largest two-wheeler manufacturer reported 36.7% drop in net profit at ₹686 crore for Q3FY22 against ₹1,084.5 crore in the year ago period. Revenue fell 19.4% to ₹7,883 crore against ₹9,776 in December quarter of 2020.

Mahindra and Mahindra (M&M): The net profit of auto major surged 2.5 times YoY to ₹1,353 crore for the quarter ended December 31, 2021. Net sales increased 8 per cent YoY to ₹15,239 crore. The auto major sold 1,18,174 vehicles during the period under review, down 2% from 1,21,133 units in the third quarter of last fiscal.

Torrent Power: The power company has acquired a 25 MW solar power plant from Blue Diamond Properties & Balrampur Chini.

Aurobindo Pharma: The company reported an 80% fall in consolidated net profit to ₹604.29 crore for the quarter ended December compared with a year earlier. Revenue from operations dipped 6% YoY to ₹6,002 crore. The company declared an interim dividend, the third for the fiscal, of ₹1.50 per share of ₹1.

Zomato: The food delivery giant’s loss narrowed to ₹66 crore in the December 2021 quarter (Q3) as compared to year-ago period. The revenue rose 86% YoY to ₹1,112 crore in Q3.

Hindalco: The Aditya Birla Group's metals flagship company posted a 95.7% YoY rise in consolidated net at ₹3,675 crore for the quarter ended December 31, 2021. Total income jumped 44% to ₹50,272 crore.

MRF: Tyre manufacturer posted 71% YoY fall in net profit to ₹149 crore during Q3FY22, from ₹521 crore in Q3FY21. The revenue from operations rose 6% YoY to ₹4,920 crore.

Strides Pharma: The company posted a net loss of ₹122 crore in the December 2021 quarter compared to a net profit of ₹378 crore in the year ago period. Total income fell 5% YoY to ₹794 crore.

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

Wall Street falls on rate hike concerns

On Wall Street, all three major U.S. indices closed lower in overnight trade as investors reacted to labour department data that showed consumer prices surged 7.5% in January, registering the biggest annual increase in inflation since 1982. The record rise in U.S. inflation stoked fears that the Federal Reserve will change its policy stance sooner than expected.

The market sentiment was further dented after St Louis Federal Reserve Bank President James Bullard, a voting member of the central bank’s rate-setting committee, said the inflation figures had made him "dramatically" more hawkish.

Reacting to inflation data, the Nasdaq Composite ended 2.1% lower, the Dow Jones Industrial Average fell 1.5%, and the S&P 500 tumbled 1.8%.

Asian shares follow Wall Street lower

Shares in the Asia-Pacific region traded mostly lower in early trade on Friday, following a negative finish at Wall Street overnight. Investors reacted to the U.S. CPI inflation which surged 7.5% in January, the highest in the last 40 years. The record rise in the U.S. inflation pushed Treasury yields higher.

Hong Kong’s Hang Seng index dropped 0.5%, Taiwan Weighted Stock fell 0.35%. South Korea’s KOSPI tumbled 0.7%, while Australia’s ASX 200 index slipped 0.78% in early deals.

In mainland China, the Shenzhen Component tumbled 0.58%, while the Shanghai Composite closed 0.18% lower.

Bucking the trend, the Straits Times in Singapore rose 0.15%

Corporate earnings

The big players that will release their December quarter earnings reports today include Ashok Leyland, ONGC, Divis Labs, Motherson Sumi Systems, Oil India, India Cements, Godrej Industries, Fortis Healthcare, Glenmark Pharmaceuticals, and others.

Among others, Allcargo Logistics, Anupam Rasayan, Apollo Hospitals Enterprise, Arvind Fashions, Bajaj Hindusthan Sugar, Balaji Telefilms, Mrs Bectors Food Specialities, Brookfield India Real Estate Trust REIT, Dhanlaxmi Bank, Force Motors, Honeywell Automation, HUDCO, Indigo Paints, Inox Wind, Jaiprakash Power Ventures, Kalpataru Power Transmission, Mazagon Dock Shipbuilders, Metropolis Healthcare, MOIL, Nazara Technologies, NHPC, Power Finance Corporation, Puravankara, RateGain Travel Technologies, Shree Renuka Sugars, Sapphire Foods, Shriram EPC, Sobha, Star Health and Allied Insurance Company, Ujjivan Financial Services, Voltas, and VA Tech Wabag, will also release their earnings report on February 11.

FIIs remain net sellers, DIIs turn net buyers

The foreign institutional investors (FIIs) remained net sellers in the Indian equity market on February 10, while domestic institutional investors (DIIs) emerged as net buyers. As per the data available on the NSE, FIIs net sold shares worth ₹1,732.6 crore, while domestic institutional investors (DIIs) net purchased shares worth ₹2,727.2 crore in the domestic equity market.

Gold prices fall on Fed rate hike concerns

Gold prices traded lower on Friday as a hotter-than-expected U.S. inflation pushed Treasury yields higher. Spot gold fell 0.2% to $1,826.49 per ounce, while US gold futures tumbled 0.5% to $1,827.10.

Oil prices retreat on inflation woes

The crude oil prices edged lower during early trade on Friday as a record rise in U.S. inflation renewed fears about aggressive rate hikes by the Federal Reserve.

During the early Asian trading hours, the global benchmark Brent crude futures fell 0.13% to $91.29 per barrel, and the U.S. West Texas Intermediate (WTI) crude futures rose 0.2% to $89.92 a barrel.

In overnight trade, Brent crude oil price fell 0.4% to $91.01 a barrel, while the U.S. WTI added 0.3% to $89.63 per barrel.

The market is focused on a meeting outcome of US-Iran talks that could boost global crude supply.