Sensex, Nifty Seen Lower As Global Selloff Continues

Indian shares look set to open notably lower on Monday, with the latest Covid-19 developments, Q3 earnings results and the expiry of monthly F&O contracts likely to be in focus in the holiday-truncated week.

Finance Minister Nirmala Sitharaman will present her fourth budget on February 1 against the backdrop of upcoming elections in five states and the ongoing third-wave of Covid-19 that began to sweep the country from December.

The Indian SARS-CoV-2 Genomics Consortium (INSACOG) said in its bulletin that the highly infectious Omicron variant of Covid-19 is in the community transmission stage in India, adding that it has become dominant in multiple metros where new cases have been rising exponentially.

On the earnings front, oil-to-telecom major Reliance Industries reported sharply higher consolidated profit at Rs 20,539 crore in the third quarter, while private sector lender ICICI Bank reported over 25 percent growth in net profit for the December quarter, helped by lower provisioning and higher net interest income.

Axis Bank, Dr Reddy’s Laboratories, Kotak Mahindra Bank, Larsen & Toubro, Maruti Suzuki, NTPC and Vedanta are among the prominent companies that will unveil their quarterly earnings results this week.

Benchmark indexes Sensex and the Nifty fell around 3.5 percent each last week – marking their first weekly loss after four back-to-back weekly gains.

Asian markets fell broadly this morning as investors await the Fed’s latest policy decision on Wednesday, coming at a time when uncertainty around an earlier-than-expected policy normalization has rattled financial markets the world over. Investors also digested inflation data from Japan and Australia.

U.S.-Russia tensions over Ukraine were also on investors’ radar, with the U.S. ordering family members at its embassy in Kyiv to leave Ukraine.

The dollar held steady and gold was little changed while oil prices rose about 1 percent in Asian trade on fears of tighter supply amid rising geopolitical tensions in Easter Europe and the Middle East.

U.S. stocks fell for a fourth straight session on Friday, fueled by a weak earnings report from Netflix and concerns about tightening Federal Reserve policy.

The Dow dropped 1.3 percent, the tech-heavy Nasdaq Composite tumbled 2.7 percent and the S&P 500 shed 1.9 percent.

European markets finished Friday’s session sharply lower as investors reacted to weak economic data, disappointing earnings updates and rising tensions between the U.S. and Russia over Ukraine.

The pan European Stoxx 600 plummeted 1.8 percent. The German DAX plunged 1.9 percent, France’s CAC 40 index lost 1.8 percent and the U.K.’s FTSE 100 declined 1.2 percent.