Market Ahead Podcast, July 22: Top factors that could guide markets today

A pullback rally is on the cards for Dalal Street as it looks to resume trade after a one-day gap, thanks to a rally in US equities over the last two days. Wall Street indices rose nearly 3 per cent in the previous two sessions, boosted by robust corporate earnings and renewed optimism about the US economic recovery.

On Wednesday, Dow Jones Industrial Average rose 0.83%, the S&P 500 gained 0.82% and the Nasdaq Composite added 0.92%.

Along expected lines, Asian peers followed suit, tracking the optimism in US stocks. Australia’s S&P/ASX 200 index rose 0.9%, South Korea’s Kospi index increased 0.9% while Japan was closed for a holiday. S&P 500 and Nasdaq futures also traded firm.

Amid this setup, SGX Nifty was trading 105 points higher at 15,737 around 7.40 am. Volatility in trade is likely on account of stock-specific moves amid quarterly earnings and weekly derivatives expiry.  

In the commodities market, Brent crude prices rallied over 4 per cent on Wednesday to top the $72 a barrel mark. In early trade today, they held to gains as signs of stronger demand helped offset an unexpected rise in US inventories.

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

Forty-four companies including Hindustan Unilever, Bajaj Auto, Ultratech Cement, Biocon, Hindustan Zinc, IIFL Securities, IndiaMART InterMESH and Wockhardt will release their quarterly earnings today.

Brokerages project Bajaj Auto's profit and revenue to more than double on a yearly basis but on quarter-on-quarter (QoQ) terms, the figures are likely to decline. Profitability is expected to be supported by a better mix, price hikes and cost-control measures.

As for HUL, analysts say helped by the low-base effect and traction in beauty & personal care and foods & refreshment segments, the FMCG major is expected to post a 7-15% YoY rise in Q1 profit. Meanwhile, revenue projections wary between 11-21%.

Bajaj twins - Bajaj Finance and Bajaj Finserv will also be in limelight following their quarterly show. Bajaj Finserv reported an over 31 per cent YoY decline in consolidated net profit at Rs 833 crore for the first quarter ended June 2021. Meanwhile, Bajaj Finance posted a 3 per cent YoY decline in net profit to Rs 843 crore for the same quarter.

The Reserve Bank of India has allowed IDFC to exit the IDFC First Bank after the expiry of the lock-in period of 5 years.

The promoter and promoter group of Allcargo Logistics has announced a plan to acquire all the equity shares held by public shareholders and voluntarily delist from the stock exchanges by making a delisting offer under the delisting regulations of the stock market regulator SEBI.

Jubilant FoodWorks reported a net profit of Rs 62.6 crore for the quarter ended June as against a net loss of Rs 72.6 crore in the year-ago quarter. The company’s revenue from operations saw a 131 per cent surge in the quarter to Rs 879 crore.

Lastly, another new-age tech company is looking to hit the primary market to raise funds. Policybazzar is planning to raise Rs 6,500 crore. PB Fintech, the parent company of Policybazaar in a regulatory filing approved a resolution to raise the said amount via a fresh issue of equity. Furthermore, Zomato's shares are likely to be allotted to investors today and some media reports suggest the company could list on Friday as against Monday expected earlier.