Indian Shares To Open On Cautious Note As Focus Shifts To RBI
(RTTNews) - Indian shares are seen opening on a cautious note on Tuesday after four consecutive sessions of gains.
Investors may track developments in the U.S.-Iran conflict and await upcoming RBI's monetary policy decision for directional cues.
The RBI will announce its monetary policy decision on Wednesday, with the central bank widely expected to retain the repo rate at 5.25 percent for a fourth consecutive meeting and continue with its neutral policy stance.
On the geopolitical front, U.S. President Donald Trump said negotiations with Iran were ongoing and this is a last chance for them to sign a good document before decapitation.
Trump outlined a two-stage roadmap for any potential agreement. "The first phase is the opening of the straits. The second phase will be the denuclearization," Trump said.
However, Tehran denied that any negotiations are taking place, adding only confirmed discussions were with Oman over a temporary shipping route through the Strait of Hormuz.
Amid heightened regional tensions, a cargo vessel was reportedly struck by an unknown projectile in the Strait of Hormuz off the coast of Oman.
Benchmark indexes Sensex and Nifty surged 0.7 percent and 1.6 percent, respectively on Monday, with underlying sentiment helped by a sharp decline in crude oil prices and sustained foreign institutional investor inflows.
The dramatic jump in the Nifty index in the final minutes of trade was driven by the implementation of the new CAS-based settlement procedure.
The rupee settled 12 paise higher at 95.31 against the dollar, extending its winning streak for the sixth straight trading session.
Foreign institutional investors net bought shares worth Rs 922.26 crore on Monday, while domestic institutional investors net bought shares to the extent of Rs. 1,571.18 crore, according to provisional exchange data.
Asian markets were mixed in volatile trade. The U.S. dollar index was pinned near a two-month low while the yield on the U.S. 10-year Treasury bond edged up slightly to 4.684 percent on bets the Federal Reserve may deliver a quarter-point rate hike in September.
Federal Reserve Bank of New York President John Willams said he expects inflation to fall in the second half of 2026, but the Fed will act if it stays above its 2 percent target.
The yen held on to most of its intervention-driven gains after U.S. Treasury Secretary Scott Bessent publicly called on the Federal Reserve to expand its FIMA Repo Facility to help Japan avoid directly selling U.S. Treasuries when supporting the Japanese currency, reigniting concerns about Fed independence.
Gold was little changed at $4,057 an ounce while Brent crude futures traded higher at $84.40 a barrel in Asian trade, after having fallen to a three-week low on Monday.
U.S. stocks posted strong gains overnight on the back of easing oil prices, lower Treasury yields and upbeat manufacturing data.
The Dow rose 1.3 percent to notch a record-high close and the S&P 500 climbed 1.5 percent while the tech-heavy Nasdaq Composite soared 2.1 percent to extend gains for the third consecutive day, led by cloud providers.
European stocks closed mostly higher on Monday after U.S. President Trump canceled a planned attack on Iran and announced that he was preparing for renewed negotiations with Tehran to end the regional war.
The pan-European STOXX 600 gained half a percent. The German DAX rallied 1.5 percent and France's CAC 40 surged 1.2 percent while the U.K.'s FTSE 100 finished marginally lower following downwardly revised manufacturing PMI data.
