Benchmark indices in India are expected to open in green with positive global cues backing them on Thursday. The markets had closed Wednesday with record gains mainly powered by auto stocks. SGX Nifty has opened in green. Markets will watch the Wholesale Price Inflation, trade balance and export import data to be released later in the day. Companies, including Century Textiles & Industries, Cyient, Den Networks, HCL Technologies, and Indibulls Real Estate will be releasing their September quarter results today. Global markets will be watching earnings reports of Morgan Stanley and Citigroup Inc. Data on US initial jobless claims, PPI will also be watched. Indian markets will be closed on Friday for Dussehra.
On Infosys results: Jyoti Roy – DVP- Equity Strategist, Angel One Ltd
“Infosys reported a 5.7% quarter-on-quarter (q-o-q) growth in revenues to $3,998 million which was well ahead of estimates. Topline growth was driven by digital which grew by 10.0% q-o-q. In rupee terms, revenue grew by 6.1% q-o-q to ₹29,602 crore while gross profits grew by 4.3% q-o-q to ₹9,796 crore. Gross margins contracted by 57bps q-o-q to 33.1% largely on account of higher sub contracting costs which was partially offset by better utilization. Operating profits grew by 5.6% q-o-q to ₹6,972 crore while EBIT margins contracted by 10bps q-o-q to 23.6%. Net profit for the quarter grew by 4.4% q-o-q to ₹5,421 crore. Infosys also maintained its deal momentum as the company reported deal wins of $2.15 billion compared with $2.6 billion in Q1FY22. Overall, Infosys has reported better than expected numbers especially on the revenue growth front. Post the Q2FY22 numbers, we maintain our positive outlook on Infosys with a price target of ₹2,016 (32xFY23 EPS estimate of ₹63.0).”
Singapore unexpectedly tightens monetary policy as price pressures grow
Singapore’s central bank unexpectedly tightened monetary policy on Thursday, saying the move would ensure medium-term price stability amid mounting cost pressures caused by supply constraints and the global recovery. The city-state joins a group of economies that have begun to dial back heavy pandemic-era monetary stimulus, as the threat of inflation outweighs the growth risks posed by the coronavirus. The Monetary Authority of Singapore (MAS) manages monetary policy through exchange rate settings, rather than interest rates, letting the Singapore dollar rise or fall against the currencies of its main trading partners within an undisclosed band. It adjusts its policy via three levers: the slope, mid-point and width of the policy band, known as the Nominal Effective Exchange Rate, or S$NEER.
Stocks to watch
HCL Tech, ZEEL and FMCG are among stocks to watch today. (Read here)
Stocks up on recovery hopes; treasuries trim gains
Global stocks, including those in Asian markets, rose Thursday as traders assessed the durability of the economic recovery to inflationary pressures and a looming reduction in the Federal Reserve’s pandemic-era stimulus. Equities climbed in Japan, South Korea and Australia. Financial markets in Hong Kong are closed on Thursday for a holiday. US futures pushed higher after Wall Street snapped a three-day losing streak, with the tech-heavy Nasdaq 100 outperforming the S&P 500. Longer term Treasuries pared a rally, while a key part of the Treasury yield curve has flattened to around a one-year low. US inflation held above 5% and Fed minutes signalled a tapering of bond purchases from mid-November or mid-December. Meanwhile, a 30-year Treasury auction drew strong demand. Crude oil stabilized above $80 a barrel and gold was near the highest in nearly a month. Singapore’s dollar rose after the central bank unexpectedly tightened monetary policy settings. Upcoming China inflation figures will offer a window on the impact of supply chain disruptions and a jump in energy prices.
S&P 500 futures rose 0.3% as of 10:01 a.m. in Tokyo. The S&P 500 rose 0.3%
Nasdaq 100 futures increased 0.4%. The Nasdaq 100 rose 0.8%
Japan’s Topix index climbed 0.3%
South Korea’s Kospi added 1.1%
Australia’s S&P/ASX 200 Index gained 0.8%
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