US markets erase gains after Fed bouncer. Nifty to fall further?

Good Morning Everyone, US markets which were recovering strongly yesterday, nosedived and closed negative after the bouncer from the FEDERAL RESERVE on the rate hike. The Federal Reserve on Wednesday said it is likely to hike interest rates in March and reaffirmed plans to end its bond purchases that month in what U.S. central bank chief Jerome Powell pledged will be a sustained battle to tame inflation.

Global markets are weak and hence we will see weakness to continue in India.

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Global Markets:

An early market rally gave way to a broad slide for stocks and a surge in bond yields on Wall Street Wednesday after the Federal Reserve signaled it plans to begin raising interest rates soon. S&P 500 fell 0.1 percent, Dow Jones declined 0.4 percent, and the tech-heavy Nasdaq rose less than 0.1 percent.

Asian shares were trading mixed Thursday as investors digested Fed Chair Jerome Powell’s comments. MSCI's broadest index of Asia-Pacific shares ex-Japan declined over 1.5 percent. Shares in Japan declined over 1.5 percent. Chinese blue chips were flat. Hong Kong’s HSI was down over 1.3 percent. South Korea’s Kospi was down 2 percent. Elsewhere in Australia, stocks slumped nearly 1.5 percent.

Oil prices touched $90 for the first time Wednesday in seven years, supported by tight supply and rising political tensions. On Wednesday, prices corrected a bit with the Brent crude at $89.76 and the US oil at $87.20.

Indian Market:

Trends on the SGX Nifty indicate a big gap-down opening to Nifty today. 16800-17000 will be major support which if broken can see major bearishness in the market for the short term.

The International Monetary Fund (IMF) has raised its forecast for growth in India's gross domestic product (GDP) in FY23 by 50 basis points (bps) to 9 percent. India's GDP growth forecast for FY24 was also raised by 50 bps to 7.1 percent.

Explaining the upward revision in an update to its World Economic Outlook report, released on January 25, the IMF said it expects an improvement in India's credit growth – which would boost consumption and investment – and "better-than-anticipated performance of the financial sector".

Adani Wilmar Ltd, incorporated in 1999 as a joint venture between Adani Group and Wilmar Group of Singapore, is an FMCG company offering kitchen commodities for Indian consumers including edible oil, wheat flour, rice, pulses, and sugar.

Adani Wilmar will float its Rs 3,600 crore initial public offering (IPO) on January 27 and close it on January 31. The Rs 3,600 crore IPO involves only a fresh issuance of about 15.65 crore shares and does not include an offer for sale.

Gita Gopinath has warned monetary policy is at a "critical juncture" in most countries and that economies will need to adapt to higher interest rates globally.

"Where inflation is broad-based alongside a strong recovery, like in the United States, or high inflation runs the risk of becoming entrenched, as in some emerging market and developing economies and advanced economies, extraordinary monetary policy support should be withdrawn," Gopinath wrote in an article accompanying the IMF's update to its World Economic Outlook report, released on January 25.

Results today

Bharat Heavy Electricals, Punjab National Bank, RBL Bank, Canara Bank, Indus Towers, Accelya Solutions India, AIA Engineering, Arvind, Aurionpro Solutions, Birlasoft, CG Power and Industrial Solutions, Chalet Hotels, Coforge, Colgate-Palmolive, Dalmia Bharat, Exxaro Tiles, Fino Payments Bank, GHCL, Gujarat Mineral Development Corporation, Home First Finance Company, HSIL, Laurus Labs, LIC Housing Finance, Mahindra Logistics, CE Info Systems, Motilal Oswal Financial Services, Nippon Life India Asset Management, PSP Projects, Route Mobile, Transport Corporation of India, Vaibhav Global, Wabco India, and Wockhardt.

FII and DII data

Foreign institutional investors (FIIs) net sold shares worth Rs 7,094.48 crore, while domestic institutional investors (DIIs) net bought shares worth Rs 4,534.53 crore in the Indian equity market on January 25.

Stock Specific News:

Reliance Industries | Reliance has roped Uday Shankar, former Star & Disney India chairman, and James Murdoch, as strategic partners in the growing media business, according to the sources. Both individuals will play a vital role in contributing to the growth in the media business, they said.

Tata Group | The Indian government is likely to hand over Air India to the Tata Group today, nearly 69 years after it was taken from the conglomerate, officials said on Wednesday. After a competitive bidding process, the government had on October 8 last year sold Air India to Talace Private Limited—a subsidiary of the Tata Group's holding company—for Rs 18,000 crore.

Raymond | The company reported a higher profit at Rs 101 crore in Q3FY22 against Rs 22.1 crore in Q3FY21, revenue jumped to Rs 1,843.3 crore from Rs 1,243.4 crore YoY. The company to demerge its real estate operations into a subsidiary.

Indiabulls Real Estate | The company posted a loss at Rs 87 crore in Q3FY22 against a profit of Rs 80.6 crore in Q3FY21, revenue fell to Rs 322.8 crore from Rs 721.6 crore YoY.

Jindal Steel & Power | ICRA has upgraded its rating from A+ with a 'positive' outlook to AA- with a 'stable' outlook on the long-term bank facilities and has reaffirmed the rating of A1+ for short-term bank facilities of the company.

Route Mobile | The company's officials will meet investors and analysts on January 27 to discuss financial results.

Cipla | The company reported higher profit at Rs 756.88 crore in Q3FY22 against Rs 751.6 crore in Q3FY21, revenue increased to Rs 5,478.86 crore from Rs 5,169 crore YoY.

Fineotex Chemical | The company's officials will meet Kotak Life Insurance, Goldman Sachs Asset Management, and IDFC MF on January 27.

Torrent Pharma | The company clocked lower profit at Rs 249 crore in Q3FY22 against Rs 297 crore in Q3FY21, revenue rose to Rs 2,108 crore from Rs 1,995 crore YoY.


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