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Stock markets open positive: Sensex up, Nifty near 15,930; LIC shares to be listed on BSE, NSE today

Free Press Journal logo Free Press Journal 17-05-2022
Asian shares edged higher on Tuesday despite data reinforcing investor fears the global economic recovery may be more fragile. /Representative image © Provided by Free Press Journal Asian shares edged higher on Tuesday despite data reinforcing investor fears the global economic recovery may be more fragile. /Representative image

The benchmark stock market indices opened higher on May 17. At 09:16 IST, the Sensex was up 262.08 points or 0.49 percent at 53,235.92. Nifty was up 87.20 points or 0.55 percent at 15,929.50. About 1429 shares have advanced, 299 shares declined, and 58 shares are unchanged.

Hindalco, ONGC, JSW Steel, Tata Steel and IndusInd Bank were among major gainers on the Nifty. NTPC, Power Grid Corp, Tech Mahindra, TCS and Cipla were among major laggards.

Asian stocks advance in early trade

Asian stocks advanced Tuesday as investors evaluated the economic outlook amid elevated food and fuel costs, tightening monetary settings and China’s push to stamp out Covid.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.84 percent on Tuesday, but is still down the index is down 6.7 percent so far this month. U.S. stocks ended the previous session with mild losses. In Tokyo, the Nikkei was flat in early trade, while in Australia the S&P/ASX200 index gained 0.34 percent.

Hong Kong's Hang Seng Index was 1.2 percent higher and mainland China's CSI300 Index gained 0.07 percent. The US dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was flat in Asian trade to be at 104.1.

US stocks close positive

Dow industrials eked out a slightly positive finish on Monday, while the S&P 500 saw its gains entirely evaporate during the final hour of trading, extending a stock-market selloff following a batch of weak data from China and the US that fueled more concerns about the state of the global economy.

The S&P 500 declined 0.4 per cent, while larger losses were incurred on the Nasdaq Composite which dropped 1.2 percent, to 11,664. The Dow Jones index was barely positive, up just 0.08 percent.

On Monday, the New York Fed’s Empire State business conditions index, a gauge of manufacturing activity in the state, plummeted 36.2 points to negative 11.6 in May. Economists had expected the index to fall slightly to a solid 16.5 reading.

US GDP to grow 2.4%: Goldman Sachs

Goldman Sachs economists, led by Jan Hatzius, said they now expect US gross domestic product to grow 2.4 percent this year, and 1.6 percent in 2023, down from 2.6 percent and 2.2 percent previously. They feel there is “a very, very high risk factor” that the US is headed for a recession as the Federal Reserve tightens policy to tackle high inflation. Former Fed Chairman Ben Bernanke told the New York Times the U.S. could be heading into a period of stagflation for the first time since the 1970s.

Dollar up

The two-year yield, which rises with traders' expectations of higher Fed fund rates, touched 2.578 percent compared with a US close of 2.568 percent. "Markets currently price the Fed funds rate to be 53 basis points higher at the next meeting in June, and 200 basis points higher by year end," said Imre Speizer, Westpac's head of New Zealand strategy.

The dollar rose 0.06 percent against the yen to 129.24. It is getting closer to its high this year of 131.34. The European single currency was up 0.1 percent on the day at $1.0437, having lost 0.99 percent in a month.

US crude dips

U.S. crude dipped 0.18 percent to $113.99 a barrel. Brent crude was slightly higher at $114.40 per barrel. Gold was slightly higher. Spot gold was traded at $1,826.7072 per ounce.

LIC to be listed on bourses today

Life Insurance Corporation of India (LIC) will list on the stock exchanges tomorrow, following the initial public offer (IPO) which was oversubscribed nearly three times the issue size.

The government has fixed the issue price of LIC shares at Rs 949 apiece, the upper end of the IPO price band, fetching the exchequer around Rs 20,557 crore.

According to recent grey market patterns, the LIC`s unlisted shares were selling at Rs 936 per share on Saturday, a discount of Rs 13 to the IPO price band`s upper range.

According to recent grey market patterns, the company's unlisted shares were selling at Rs 936 per share on Saturday (May 16), a discount of Rs 13 to the IPO price band's upper range. However, the stock's modest float may limit the stock's post-listing decline.

RBI may hike rates by 75 bps by August: SBI economists

At least 59 percent of the accelerated inflation is attributable to the impact of the geopolitical conflict triggered by the Russian invasion of Ukraine, economists at SBI said on Monday.

In the face of the heightened inflation situation – the headline number touched nearly 7.8 percent for April, and the RBI is set to hike rates by another 0.75 percent to get the repo rate back to the pre-pandemic level of 5.15 percent, they added.

''Against the continued increase in inflation, it is now almost certain that RBI will raise rates in forthcoming June and August policy and will take it to the pre-pandemic level of 5.15 percent by August,'' it said, adding that the biggest question for the central bank to ponder is whether inflation will tread down meaningfully because of such rate hikes if war-related disruptions do not subside quickly.

Results to be released today

The following companies will release their quarterly earnings today: Bharti Airtel, Indian Oil Corporation, DLF, PI Industries, Abbott India, Bajaj Electricals, Bajaj Healthcare, EID Parry (India), Indoco Remedies, IRB Infrastructure Developers, Jubilant Ingrevia, Kajaria Ceramics, Dr Lal PathLabs, Minda Corporation, Sapphire Foods India, Fairchem Organics, Galaxy Surfactants, GMR Infrastructure, NOCIL, Nucleus Software Exports, Sun Pharma Advanced Research Company, and Zydus Wellness will be in focus ahead of March quarter earnings on May 17.

Stocks under F&O ban

Three stocks – GNFC, Indiabulls Housing Finance, and Punjab National Bank – are under the F&O ban on NSE for May 17.

(With inputs from Reuters, Agencies)

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