Indian markets are expected to open bearish on Thursday, amidst concern over Covid impact and weak global cues. The SGX Nifty, which currently rules at 14,783 (8 am IST) on the Singapore Stock Exchange, indicates at least 200 points gap-down opening for Nifty futures, which on Monday closed at 14,984.65
The US markets, after opening on a firm note on Monday failed to sustain the gains and closed in the red. The Dow Jones Industrial Average slipped marginally, while S&P 500 and Nasdaq crashed over 1 per cent and 2 per cent respectively. Tracking the US markets, the Japan’s Nikkei is down 2.5 per cent in early trade on Tuesday. Other markets such as Korea, Australia, Taiwan and China are down between 0.8 per cent and 1.5 per cent.
Resurgence of the second COVID wave has dented sentiments and weakened FY22E earnings visibility. Management commentaries from the on-going 4QFY21 earnings season clearly indicate that demand would moderate, especially post the second half of April. Thus earnings downgrades are increasing vis-à-vis upgrades, said domestic brokerage Motilal Oswal in a note.
According to Binod Modi, Head Strategy at Reliance Securities, “Notwithstanding some adverse impact on economic activities for in 1Q-FY22, a sharp pickup in capital expenditures in current fiscal is still on the cards. Hence, earnings recovery in FY22E still remains promising. Therefore, any near-term possible correction in the market should be treated as opportunity of bargain trading. Investors must focus on quality stocks with robust earnings visibility and margins of safety.”
STOCKS TO WATCH
InterGlobe Aviation: The board of Directors of InterGlobe Aviation has approved the raising of funds for an aggregate amount not exceeding ₹3,000 crore through an issue of equity shares by way of a Qualified Institutions Placement subject to approval of the company's shareholders and receipt of applicable regulatory approvals.
The board of Punjab National Bank has approved opening of Qualified Institutional Placement issue and fi...