Indian shares set for muted start on rate fears, Adani uncertainty

Indian shares set for muted start on rate fears, Adani uncertainty
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BENGALURU (Feb 6): Indian shares are set to open lower on Monday on a strong US jobs report which renewed fears that the Federal Reserve could continue with its aggressive rate hikes to tame inflation, while the ongoing uncertainty in Adani stocks remained an overhang.

India's NSE stock futures listed on the Singapore exchange were down 0.05% at 17,830.50 as of 8am IST.

Wall Street equities fell on Friday after nonfarm payrolls rose by 517,000 jobs in January, way above a Reuters estimate of 185,000.

The strong data heightened fears that the Fed might continue its aggressive rate hike trajectory, with the interest rate futures now pointing to chances of the central bank delivering at least two more rate hikes.

Asian markets slid on Monday, with the MSCI's broadest index of Asia-Pacific shares outside Japan shedding 1.6%.

The Reserve Bank of India is expected to raise the key policy repo rate by 25 bps at its next policy meeting on Feb. 8, marking the end of its year-long tightening cycle.

Adding to the woes in domestic equities could be the ongoing selloff in Adani group stocks, which has caused a rout of over $100 billion in market capitalisation after the U.S. short seller Hindenburg's report on Jan. 24.

Analysts said that the selloff in Adani stocks has created panic in Indian markets. Ratings agency Moody's warned that the tumble in Adani group stocks could hit the conglomerate's ability to raise capital.

Foreign institutional investors sold 9.32 billion rupees (US$113.37 million) worth of shares on a net basis on Friday, while domestic institutional investors purchased 12.65 billion rupees of stocks, official data showed.

Stocks to watch

State Bank of India India's largest lender reports a rise in net profit in the third quarter.

ITC Co reports a higher-than-expected rise in net profit in December-quarter on strong cigarette sales and steady demand for packaged foods.

InterGlobe Aviation: IndiGo airline operator reports eleven-fold jump in 3Q profit on rise in air travel.

Marico Co reports higher-than-expected rise in net profit in 3Q on higher demand for cooking products and hair oil.

One 97 Communications: Paytm's parent sees 42% rise in revenue in 3Q, reports operating profit.