Market Ahead Podcast, July 27: Top factors that could guide markets today

The benchmark indices amid lack of any other domestic trigger apart from stock-specific led earnings action, are dancing to the tunes of global cues. After snapping the two-day winning streak on Monday, the mojo is likely to return to the markets, early indications suggest, amid gains in US and Asian peers. At 7.25 am, SGX Nifty was up 51 points at 15,872.

In the overnight session, all three major US stock indices eked out record closing highs for a second straight session as investors were optimistic heading into a slew of earnings from heavyweight technology and internet names this week. The Dow Jones Industrial Average and S&P 500 closed 0.24% higher each and the Nasdaq Composite added 0.03%.

In Asia, most markets gained and even Chinese and Hong Kong indices stabilised. Japan’s Topix index added 0.6%, Australia’s S&P/ASX 200 index rose 0.4%, South Korea’s Kospi index increased 0.8% and Hong Kong’s Hang Seng and China’s Shanghai Composite indices added 0.2% each.

Apart from global cues, investors will react to the Q1 earnings from index majors Tata Motors, L&T, Axis Bank and Vedanta that can result in stock-specific moves. Further, traders could choose to adopt a more cautious approach ahead of the US Fed's policy meeting later today. All eyes will be on whether the central bank expresses any new concerns about high inflation.

The primary markets will remain abuzz as Rs 1,514 crore issue by Glenmark Life Sciences will open for subscription today. Analysts have largely assigned a Subscribe rating to the IPO on account of the company's leadership in select high value APIs, planned capacity addition, product portfolio diversification and reasonable valuations.

Now, a look at the stock-specific triggers that are likely to guide the market today.

Over 60 companies, including IndiGo, IndusInd Bank, DRL are slated to post their quarterly numbers today.

Analysts expect IndiGo's net loss to come in anywhere between 2,500-2,700 crore as air traffic remained muted amid the second wave of Covid-19, oil prices rose, and the rupee depreciated sequentially during Q1FY22.

Meanwhile, IndusInd Bank's net profit is estimated between Rs 900-1,200 crore. However, the bank's credit cost may remain elevated due to higher fresh NPA/restructuring and additional provisioning.

Tata Motors' consolidated net loss narrowed both on a sequential and year-on-year (YoY) basis to Rs 4,451 crore, but it was more than Street's expectations. The auto major had reported a loss of Rs 8,438 crore in the year-ago period (Q1FY21) and Rs 7,605 crore loss in the previous quarter (Q4FY21). The Jaguar Land Rover (JLR) parent company reiterated that global chip shortages, uncertainty due to the spread of coronavirus variants and commodity inflation would impact business in the short term.

Larsen & Toubro reported a consolidated net profit at Rs 1,174 crore in the June quarter, up nearly four times from the same period last year on the back of increased revenues. It had reported a bottomline of Rs 303 crore in the corresponding period last year. The company’s topline in the period under review stood at Rs 29,334.73 crore, up 38% from the same period last year.

Axis Bank posted a standalone profit of Rs 2,160.15 crore for the quarter ended June 2021, thereby rising 94.2% YoY due to low base. Net interest income grew by 11.1% YoY to Rs 7,760.27 crore in Q1FY22.

The government will sell an 8% stake in Housing and Urban Development Corporation (HUDCO) through an offer for sale (OFS), and is expected to mop up about Rs 721 crore from the transaction. The OFS would open for non-retail investors on Tuesday and for retail investors on Wednesday.