Markets likely to be volatile ahead of Fed meet; Maruti, IDBI Bank in focus

The International Monetary Fund (IMF) on Tuesday slashed India’s economic growth projection for FY22 to 9.5% from 12.5% estimated in April, citing a slow recovery in consumer confidence because of the ferocious second wave of the pandemic and a tardy vaccination programme

Markets are likely to remain volatile on Wednesday ahead of the US Federal Reserve meet. Trends in SGX Nifty suggest a flat opening of Indian benchmark indices. On Tuesday, the BSE Sensex ended at 52,578.76, down 273.51 points or 0.52%. The Nifty closed at 15,746.45, down 78 points or 0.49%.

Asian shares stayed stuck at seven-month lows on Wednesday, as markets continued to digest a storm in Chinese equity markets, while the dollar rested with traders reluctant to place large bets ahead of the outcome of the Federal Reserve meeting.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.35% in early trading, having fallen in each of the three previous sessions as regulatory crackdowns in China roiled stocks in the technology, property and education sectors, leaving international investors bruised.

Japan's Nikkei slid 1.01%, Chinese bluechips dropped 1.51%, and Australian shares fell 0.43%. Hong Kong bucked the trend, rising 0.63%, after closing at its lowest level since November the day before.

The statement from the Fed policy meeting, and a press conference from chairman Jerome Powell are due tonight.

Markets will be watching closely for any hints in relation to inflation, economic growth, interest rates and when the Fed will likely start reducing its purchases of government bonds.

The declines in Asian equities on Tuesday spread to other markets overnight, causing Wall Street to retreat a little from the record highs set earlier in the week.

The Dow Jones Industrial Average ended Tuesday down 0.2%, the S&P 500 shed 0.5% and the Nasdaq Composite slid 1.2%. Earlier the pan-European STOXX 600 index finished 0.54% lower.

The International Monetary Fund (IMF) on Tuesday slashed India’s economic growth projection for FY22 to 9.5% from 12.5% estimated in April, citing a slow recovery in consumer confidence because of the ferocious second wave of the pandemic and a tardy vaccination programme.

Among key companies Maruti Suzuki, Nestle (India), IDBI Bank, United Breweries, ABB India, Pfizer, Central Bank of India, Happiest Minds Technologies, and UTI Asset Management will declare their March quarter results.

Adani Ports and Special Economic Zone Ltd (APSEZ), the transport and logistics arm of billionaire Gautam Adani’s group of companies, on Tuesday said it has raised $750 million from overseas investors through a bond offering. Adani Ports, in a statement, said it has priced the $750 million senior unsecured USD notes issuance with 20 years and 10.5 years tranches at a fixed coupon of 5.0% and 3.8% respectively. The issuances were oversubscribed over three times, the company said.

In currency markets, the US dollar sat below recent highs after a month long rally, the safe-haven yen gained and the risk-sensitive Australian and New Zealand dollars dropped back.

Oil prices rose as industry data showed US crude and product inventories fell more sharply than expected last week, outweighing worries about the consequences of surging covid-19 cases.

U.S. crude ticked up 0.47% to $72.01 a barrel and Brent crude rose 0.35% to $74.77 per barrel.

Gold was slightly lower, with spot trading at $1,798.45 per ounce.
 

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