PremiumIndian indices are likely to witness a flat start on Thursday. On Wednesday, the indices gave up gains to trade lower, tracking weak Asian and US trends. Key Wall Street indices ended higher overnight in a choppy trading session, following a boost from strong earnings from Microsoft and Visa, with concerns of a global economic slowdown, lockdown in China, high inflation, and US rate hikes keeping the bulls in check. The roller-coaster ride in markets is likely to continue as multiple headwinds dampen risk appetite of investors. Oil prices edged lower in early Asian trade on Thursday. In Asia, shares rose in Japan, South Korea, Hong Kong, Australia, while that in Shanghai declined.
Our channel check suggests that March saw strong growth in most of the categories led by increased stocking by dealers/retailers in anticipation of sustained price increase. After two consecutive bad summers, we have seen strong offtake in air conditioner category even as demand for air-cooler remain soft. In whitegoods, demand for Direct cool (DC) refrigerator category remains muted; whereas there is continuous shift towards premium products (Frost Free Ref, front load washing machine). Channel feedback suggest that rising inflation may adversely impact demand in appliances and white goods. Demand remains muted in rural India given increased prices in basic categories across all products (particularly in fans).
We maintain Crompton consumer as our top pick given strong market position in core categories, expected synergy gains from butterfly acquisition and attractive valuation (28x FY24 EPS). Voltas will be a key beneficiary of strong AC demand, in our view. We retain hold on Voltas as Volt-Bek JV continues to be under investment phase and ramp-up is slower than expectations, in our view.
Japanese shares rose on Thursday as technology heavyweights led the gains, although investors remained cautions ahead of an outcome of a two-day Bank of Japan (BOJ) policy meeting.
By 0149 GMT, the Nikkei share average was up 0.5% at 26,516.32, after entering negative territory earlier in the session. The broader Topix had risen 0.83% to 1,876.13.
"Sentiment was supported by a very limited loss on the Nasdaq overnight after its big losses in its previous session," said Takatoshi Itoshima, a strategist at Pictet Asset Management.
"But, investors were very cautious as they await the outcome of the BOJ's policy meeting. It is unlikely that the central bank would change its dovish stance, but if it does, the currency market could move and that would affect the stock market."
6 stocks to buy or sell today — 28th April
The global economy will expand more slowly than predicted three months ago, according to Reuters polls of over 500 economists, who said higher commodity prices and an escalation in the Russia-Ukraine war could prompt another downgrade.
Already under pressure from monetary tightening as central banks try to stem rising inflation, world economic output was dealt a body blow when Russia invaded Ukraine on Feb. 24, sending commodity prices through the roof and triggering waves of economic sanctions.
When asked to name the biggest two downside risks to the global economy this year, the top picks of roughly 200 respondents were persistently higher commodity prices and a further escalation in the Russia-Ukraine war.
Share markets steadied on Thursday, taking comfort in technology earnings, though an energy crisis in Europe and China's lengthy lockdowns kept the mood cautious and have propelled the dollar close to 20-year highs as investors seek out safety and yield.
Nasdaq 100 futures were up 1% in the Asia session and S&P 500 futures rose 0.7% after Facebook owner Meta beat Wall Street profit forecasts and said it had eked out user growth, sending its shares up almost 20% after hours.
A rally in Microsoft shares overnight also helped Wall Street indexes to a steady close.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5%, led by a 1% bounce in Australian stocks from Wednesday's one-month trough.
Oil prices edged lower in early Asian trade on Thursday as concerns about rising coronavirus cases in China, the world's biggest oil importer, weighed on futures markets.
China's capital Beijing reported 48 new symptomatic and 2 new asymptomatic COVID-19 cases for April 27, state broadcaster CCTV reported on Thursday.
The city recorded 31 symptomatic cases a day earlier and three asymptomatic ones, as it began a mass testing program aimed at containing a new outbreak.
Brent crude futures fell 37 cents, or 0.4%, to $104.95 a barrel by 0006 GMT. U.S. West Texas Intermediate crude futures fell 27 cents, or 0.3%, to $101.75 a barrel.
Eurozone stocks wobbled and the euro struck a five-year low against the dollar on Wednesday as worries over gas supplies ratcheted higher.
Meanwhile, Wall Street saw something of a recovery from sharp losses the previous day caused by ongoing worries about growth, rising interest rates and inflation, though the Dow and S&P 500 won only 0.2 percent each and the hard-hit tech stocks in the Nasdaq ended flat.
Facebook rebounded from a drop in users early this year and its parent Meta posted a profit ahead of Wall Street targets, defying low investor expectations with a quarterly report that sent shares up 20%.
Meta CEO Mark Zuckerberg also said that the company would scale back costs and was investing in artificial intelligence tools to improve recommendations and ads, a sign Meta is buckling down to make money while working on its long-term ambitions to build the metaverse.
Its stock rose 19% in after-hours trade on Wednesday.
Key U.S. equity indexes ended higher after choppy trade on Wednesday on a boost from strong earnings from Microsoft and Visa, as commodity stocks lifted European shares to their first gain in four sessions.
The euro dropped to its weakest since 2017 after Russia halted gas supplies to Bulgaria and Poland, and investors fretted more about the region's economy.
The dollar continued its surge, on course for its biggest monthly gain since January 2015 as expectations mounted that the U.S. Federal Reserve will hike interest rates aggressively in coming months and the American economy will be stronger than the euro zone.
The Dow Jones Industrial Average rose 0.19% to end at 33,301.93 points, while the S&P 500 gained 0.21% to 4,183.92.
The Nasdaq Composite dropped 0.01% to 12,488.93.
Microsoft Corp jumped 4.8% % and Visa Inc surged 6.5%% on strong earnings, helping boost the S&P 500.
Some of Wall Street's biggest names have reported results this week, with investors seeking a counterweight to the deluge of negative news that has pounded stocks.
Download the App to get 14 days of unlimited access to Mint Premium absolutely free!