Soft opening seen for Sensex, Nifty; Tata Steel, Axis Bank, RIL, Infy, ICICI, YES Bank shares eyed

The BSE Sensex and the NSE Nifty are poised to start the week on a subdued note, following mixed cues from global peers. Shares in the Asia-Pacific region were trading mixed following a lackluster trend in U.S. stock futures as investors awaited earnings reports from major players, as well as policy announcements from the Federal Reserve. Back home, the muted trends on SGX Nifty also indicated a soft opening for the domestic bourses, with SGX Nifty futures trading 35 points, or 0.2%, lower at 16,690 levels on the Singapore Stock Exchange at 8:05 AM. Investors will keep a close eye on earnings reports by Tata Steel, Tech Mahindra, Axis Bank, and Canara Bank, while rupee movement and trends in the crude market will be also on the radar. On the global front, the focus will be on the Federal Reserve which is set to announce policy decisions on Thursday.

Last week, the Indian benchmarks settled with solid gains as domestic bourses extended their rally for the sixth straight session. The investors’ appetite for riskier assets improved due to buying by foreign investors, stablising crude prices, and firm cues from global equities. During the week ended July 22, the BSE Sensex added 2,311 points, or 4.30%, to 56,072 levels, and the NSE Nifty index soared 4.18%, 670 points, to 16,719. Among individual stocks, IndusInd Bank was the best performer on the Nifty50, thanks to its robust June quarter earnings, followed by UltraTech Cement, Axis Bank, Grasim Industries, Hindalco Industries, UPL, and State Bank of India. In the last six sessions, the market cap of BSE-listed firms jumped by ₹10.39 lakh crore to ₹261.04 lakh crore against ₹250.65 lakh crore on July 14.

Stocks to watch

Reliance Industries (RIL): The oil-to-telecom conglomerate posted a 40.8% rise in consolidated profit at ₹19,443 crore on a revenue of ₹ 242,982 crore, which surged by 53%, as discounted crude oil import from Russia boosted profitability. The earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 45.8% to ₹ 40,179 crore, while earnings per share (EPS) soared by 40% to ₹26.5.

Infosys: The IT heavyweight reported a 3.2% growth in its consolidated net profit to ₹5,195 crore for the quarter ended June 2022, as compared to ₹5,195 crore in the year-ago period. The revenue from operations grew 23.6% to ₹34,470 crore in Q1 FY23, as opposed to ₹27,896 crore in Q1 FY22.

ICICI Bank: The country's second-largest private sector lender registered 50% growth in profit at ₹6,905 crore for June quarter, driven by higher net income and a sharp decline in provisions. The net interest income rose by 20.8% to ₹13,210 crore, compared to ₹10,936 crore reported in the corresponding period of the previous fiscal.

Kotak Mahindra Bank: The private lender reported 26% YoY growth in profit at ₹2,071.15 crore for the quarter ended June 2022, supported by fall in bad loan provisions and improvement in asset quality. The net interest income of the bank grew by 19.2% YoY to ₹4,697 crore for the quarter.

YES Bank: The private bank posted a 50% YoY rise in profit to ₹310.63 crore, boosted by a significant fall in bad loan provisions. The net interest income for the quarter surged 32% YoY to ₹1,850 crore, driven by rise in credit growth and deposits.

GAIL India: The board of the state-run natural gas company will meet on July 27 to consider issuance of bonus shares.

Bharat Electronics: The PSU company has bagged a ₹250 crore contract from the ministry of defence to supply nine integrated ASW complex (IAC) MOD 'C' systems, an integrated anti-submarine warfare system for all surface ships of the Indian Navy.

Vodafone Idea: The telecom major will raise ₹436 crore from the promoter via issue of warrants. Its board has approved the issuance of 42.76 crore warrants (each convertible into one equity share) to promoter Euro Pacific Securities at an issue price of ₹10.20 per warrant.

Indiabulls Housing Finance, RBL Bank, and Delta Corp: These three companies are on the NSE F&O ban list today as the securities have crossed 95% of the market-wide position limit.

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

Wall Street slides on tech rout

On Friday, the U.S. stocks ended lower, snapping five straight sessions of gains, as renewed recession fears gripped the market amid weak earnings results from social-media firms and subdued economic data. The weak earnings numbers by Twitter and Snap indicated that there is earnings risk in these sectors, dragging shares of Facebook parent Meta and Google owner Alphabet lower. The Dow Jones Industrial Average fell 0.4%, the S&P 500 shed 0.9%, and the tech-heavy Nasdaq Composite tumbled 1.9%.

Asian shares mixed

Shares in the Asia-Pacific region were trading mixed in opening deals on Monday, tracking weak cues from the U.S. market. The market sentiment was dented after recent U.S. macro data showed signs of a slowing economy, while the Federal Reserve is widely expected to raise interest rates by at least 75 basis points at its policy meeting this week to curb inflation.

Regional heavyweight Japan’s Nikkei 225 dropped 0.8%, the Hang Seng index in Hong Kong fell 0.7%, and Taiwan Weighted shed 0.3%.

Markets in mainland China were also trading lower, with the Shanghai Composite and the Shenzhen Component falling 0.3% each.

Bucking the trend, South Korea’s Kospi climbed 0.4%, the Straits Times in Singapore rose 0.8%, and Australia’s ASX 200 edged higher with marginal gains. The Jakarta Composite in Indonesia also surged 0.1%.

Crude oil prices fall

The price of Brent and U.S. crude edged lower in early trade on Monday, trading below $100 per barrel, amid fear of recession due to rate hikes by the central banks globally. The crude oil has been hovering around $100 a barrel for several days as weak demand outlook in the backdrop of Covid restriction in China, the world’s largest oil consumer, and global economic slowdown dented market sentiments.

In Asian trading hours on Monday, the Brent oil for September delivery dropped 0.9% to $97.45 per barrel, while the U.S. West Texas Intermediate (WTI) crude September futures were down 0.8% at $93.86 a barrel.

FPIs turn net buyers in July

The foreign portfolio investors (FPIs) have turned bullish on Indian markets after a long gap of seven months. FPIs have infused ₹1099 crore in domestic markets during July 1-22, after pulling out over ₹2.55 lakh crore since December 2021. It has withdrawn ₹51,422 crore in June and ₹36,518 crore in May this year.

Corporate results

The major companies that will release their June quarter earnings include Tata Steel, Tech Mahindra, Axis Bank, Canara Bank, Macrotech Developers, KPIT Technologies. Among others, Aether Industries, Anupam Rasayan India, Aurionpro Solutions, Central Bank of India, Century Textiles & Industries, Chennai Petroleum Corporation, Craftsman Automation, Glaxosmithkline Pharmaceuticals, Indian Energy Exchange, IIFL Wealth Management, Jindal Stainless, Jyothy Labs, Lakshmi Machine Works, Orient Electric, RattanIndia Power, Sharda Cropchem, Sterlite Technologies, Tanla Platforms, Tatva Chintan Pharma Chem, and Tejas Networks will be in focus ahead of quarterly earnings on July 25.