Indian stock markets will be cautious to start trading on Wednesday, as weak global cues, rising crude oil prices and higher bond yields weigh on sentiments. GIFT Nifty was down 40.30 points at 24,055 at 6:45 a.m., pointing to a negative opening for the benchmark Nifty 50.
The domestic market had ended relatively flat in the previous session. The NSE Nifty 50 slipped 0.10% while the BSE Sensex fell 0.02%. Investors will be closely watching global markets, crude oil prices, geopolitical events, and corporate news and updates on global stocks on Wednesday's market.
Global markets are under pressure
Asian markets got weak on Tuesday as concerns about rising energy prices and how they could affect inflation and monetary policy. Higher oil prices have sent bond yields higher, stoking fears that central banks might keep a tighter monetary policy stance.
The MSCI Asia Pacific Index declined 1.8%, and South Korea’s market fell 2.9%. Japan’s Topix was down 1.6%, and Hang Seng futures were mostly flat.
US markets fell in the afternoon as well. The S&P 500 slipped 0.7% while the Nasdaq 100 lost 1.3%. The Dow Jones Industrial Average slipped 0.8%.
European and US index futures were also lower during Asian hours, with S&P 500 futures down 0.71% and Euro Stoxx 50 futures down 0.81%.
Crude Oil Rises above $95
Crude oil remains one of the most influential factors in global markets. Brent crude oil rose further above $95 per barrel after gaining 4.6% in the previous session, and West Texas Intermediate was at $91.
The latest rise has been attributed to fears of disruption of energy flows through the Strait of Hormuz as the US and Iran trade accusations.
Higher crude prices are particularly important for India because the country relies heavily on imported oil. At the same time, sustained increases in energy costs will affect inflation, corporate margins, the rupee and the market as a whole.
Gold Under Pressure
Gold was also weak today as markets worldwide continued the sell-off in securities. Gold was at $4,330 an ounce, down nearly 6%, after falling almost 6% in the past three sessions.
Spot gold was at $4,329.16 an ounce and silver at around $64.11 an ounce. Platinum and palladium were slightly lower.
The price of precious metals is being closely watched as investors determine inflation risks and what the future course of US monetary policy is likely to be.
Indian Market Recap
The Indian stock market was almost flat as investors stayed cautious on Tuesday as weak global signals and rising crude prices kept investors on edge.
The Sensex stayed below 77,000, while the Nifty 50 stayed above 24,000. The Bank Nifty was one of the weaker segments and dropped over 1% as banking stocks fell.
The big question tomorrow will be whether the Nifty can hold up to the 24,000 level in the face of continued pressure from global markets and commodities.
Stocks in News
Based on business developments and corporate announcements, there are likely to be a number of companies that will remain in focus.
Wipro said ABB has extended its engagement with the company for global digital workplace services. Adani Green Energy also got a 139 MW solar power project in Khavda in Gujarat, taking its operational renewable capacity to 20,280.8 MW.
Gland Pharma has received a positive report after the USFDA completed a GMP inspection of its sterile oncology formulations and API facilities in Visakhapatnam with zero Form 483 observations.
Coal India reported strong operational numbers, with August coal supplies up 5.5% year-on-year to 60.6 million tonnes. Supplies to the power sector rose 4.5% to 48.46 million tonnes.
NMDC reported an increase of 20.8% year-on-year in iron ore production in August to 4.07 million tonnes and sales increased 5.6% to 3.58 million tonnes. Ashiana Housing had bookings of 1.67 lakh square feet worth ₹165.9 crore for August.
Indo-Tech Transformers received a ₹55 crore order from Waaree Renewable Technologies and ARSS Infrastructure Projects secured a ₹130.5 crore railway road-over-bridge construction order from East Coast Railway. Centum Electronics also secured an order worth $3.22 million and about ₹30.5 crore.
Corporate Actions and Fundraising
India Glycols is in focus now as a result of the effect of its demerger. The shareholders will be given one IGL Spirits share for every India Glycols share and one Ennature Bio Pharma share for every three India Glycols shares held on the record date.
Gujarat Themis Biosyn approved a preferential issue of 82.1 lakh shares at ₹408 apiece and hopes to raise to ₹335 crore. Prime Focus will hold a board meeting on September 4 to discuss fundraising options including a QIP, preferential issue or rights issue.
F&O Cues
In the derivatives market, Nifty September futures were down 0.7% at 24,081, a premium of 26 points to the spot.
For the September 8 Nifty options expiry, the maximum Call open interest was 24,200 while the maximum Put open interest was 23,500.
Stocks under the F&O ban for the session are LIC Housing Finance and SAIL.
What Should Investors Watch?
In Wednesday’s session, investors are likely to assess the Nifty’s ability to hold above 24,000, crude oil, global bond yields and developments in the rest of the market.
Volatility could continue to be elevated with geopolitical tension and energy prices generating uncertainty. At the same time, company-specific developments, bulk deals and corporate actions could cause sharp moves in individual stocks.
Overall, the market is set up for a cautious start on September 2, and the global risk sentiment, crude oil prices and key technical levels are likely to influence trade.
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