Asian share markets are trading lower today, heading towards a fourth straight weekly decline as investors scrambled to catch up with the US Federal Reserve’s interest rate outlook.
Currency markets were also on edge, which dampened sentiment.
The Nikkei is down 0.6% while the Shanghai Composite fell 1.1%. The Hang Seng is trading lower by 1%.
In US stock markets, Wall Street indices ended on a negative note with the Dow Jones Industrial Average ending lower by 107 points, or 0.4% while the Nasdaq Composite dropped 153 points, or 1.4%.
Back home, Indian share markets are trading deep in the red.
Benchmark indices opened on a negative note tracking the trend on SGX Nifty live chart and amid unsupportive global cues.
Markets extended losses as global risk sentiment remained subdued amid renewed worries over economic growth.
The US Federal Reserve’s members’ projections for aggressive hikes and persistently high rates over the next year or so has unleashed another round of dollar buying that put rupee and other assets under pressure.
The BSE Mid Cap index is down 1%. The BSE Small Cap index is trading lower by 0.8%.
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Sectoral indices are trading mixed with stocks in the banking sector, finance sector and power sector witnessing most of the selling.
Pharma stocks and IT stocks, on the other hand, are trading in green.
Investors were back to hunting the best pharma stocks in India as those are considered defensive bets.
Shares of KRBL and Escorts Kubota hit their 52-week highs today.
Continuing the downtrend, Gland Pharma share price fell and hit a new low today.
Crude oil prices rose today amid prospects that a stalled Iran nuclear agreement and Moscow’s new mobilization campaign in its invasion of Ukraine would further restrict global supplies.
The rupee is trading at 81.09 against the US dollar.
With rupee’s fall, companies without a natural hedge like export earnings are rushing to take forward cover as they expect the rupee to fall gradually in the next year to as much as Rs 86-87 to a dollar.
Speaking of stock markets, chartist Brijesh Bhatia does a complete analysis of today’s market and what to expect today, in the video below.
In latest developments from the IPO space, Japan’s SoftBank has cut the valuation of OYO Hotels on its books by more than 20%.
The downgrade comes at a time when OYO is preparing for an initial public offering (IPO) early next year.
The Japanese investor, who is also the largest shareholder in OYO, cut its estimated value for the firm to US$2.7 bn in the June quarter from an earlier US$3.4 bn after benchmarking it against peers with similar operations.
OYO’s valuation had reached a peak of US$10 bn in a 2019 funding round.
On speculations that it is targeting an early 2023 IPO at a US$5-bn valuation, OYO said they have not decided the exact timing for the IPO and the IPO valuation is also highly speculative.
Earlier this week, OYO filed its earnings for financial year 2021-22 and the April-June quarter of the current fiscal as addendum to its draft red herring prospectus filed earlier with the regulator.
The hotel aggregator’s revenue from operations during the April-June period stood at Rs 14.6 bn, while losses were at Rs 4.1 bn.
It remains to be seen how the upcoming IPO of OYO fleshes out.
Moving on to stock specific news…
Reliance Industries is among the top buzzing stocks today.
Reliance New Energy, a wholly-owned subsidiary of Reliance Industries today announced investment of US$12 m into US-based Caelux to acquire 20% stake.
The company and Caelux have also entered into a strategic partnership agreement for technical collaboration and commercialisation of latter’s technology, Reliance said in an exchange filing.
Caelux is involved in development of perovskite-based solar technology.
Note that Reliance is setting up a global scale integrated photovoltaic gigafactory at Jamnagar, Gujarat.
Through this investment and collaboration, Reliance will be able to produce more powerful and lower cost solar modules leveraging Caelux’s products.
Moving on to news from the steel sector, Tata Steel share price is in focus today.
In an attempt to consolidate its metal business, the Tata Group has announced the merger of seven of its metal companies into Tata Steel.
The board of Tata Steel approved the amalgamation of seven of its subsidiaries – Tata Steel Long Products, Tata Metaliks, Tinplate Company, TRF, Indian Steel & Wire Products, Tata Steel Mining and S&T Mining into and with its parent company Tata Steel.
Explaining the rationale behind the merger scheme, Tata Steel said the resources of the merged entities can be pooled to unlock the opportunity for creating shareholder value.
Under the new amalgamation scheme, Tata Steel will give 69 shares for every 10 shares of Tata Steel Long Products.
For Tata Metaliks, Tata Steel will give 79 shares for every 10 shares of Tata Metaliks. It will give 33 shares for every 10 shares of Tinplate and 17 for every 10 shares of TRF.
Despite being among the best steel stocks in India, Tata Steel has been under intense pressure owing to multiple factors.
Tata Steel share price is falling and is down over 20% in the year gone by.
To know what’s moving the Indian stock markets today, check out the most recent share market updates here.
For information on how to pick stocks that have the potential to deliver big returns,
Indian Share Market Update: Top Gainers and Losers
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( With inputs from equitymaster)