(RTTNews) - Indian shares are seen opening little changed on Wednesday after two consecutive heavy sell-off sessions.
A cautious undertone may prevail as oil prices remain elevated and stronger U.S. inflation data reinforced bets that the Federal Reserve may have to raise interest rates next year.
Benchmark indexes Sensex and Nifty plummeted by 1.9 percent and 1.8 percent, respectively on Tuesday to extend losses for a fourth consecutive session as investors fretted about the oil price surge, a weakening rupee and continued foreign fund outflows.
IT sector woes and Prime Minister Narendra Modi's call for austerity also spooked markets. The rupee slipped to a record low closing at 95.62 against the dollar.
Speaking at an event, Chief Economic Adviser V Anantha Nageswaran said that ongoing structural shifts in the global economic order weren't going to reverse and that preventing further currency depreciation is one of the central macroeconomic imperatives of the current fiscal.
Foreign investors net sold shares worth Rs 1,959 crore on Tuesday, while domestic institutional investors net bought shares to the extent of Rs 7,990 crore, according to provisional exchange data.
Government data showed on Tuesday that India's retail inflation rose marginally to 3.48 percent in April from 3.40 percent in March, while analysts had forecast inflation to rise to 3.8 percent.
Asian stocks were mostly lower this morning as a recent tech rally lost momentum and rising bond yields led investors to rethink Fed rate cut possibilities.
The dollar held near a one-week high and gold was little changed at $4,700 an ounce after stronger U.S. CPI data pushed the two-year U.S. Treasury yield to nearly 4 percent and the 30-year yield to 5.03 percent.
Brent crude futures traded lower at $107.06 after a three-day rally as the continued closure of the Strait of Hormuz tightened global energy supplies.
Progress toward a U.S.-Iran peace agreement remains limited, with U.S. President Trump saying he doesn't need China's help to end the Iran war.
Overnight, U.S. stocks ended mostly lower as hotter-than-expected inflation data coupled with surging oil prices amid renewed concerns about the U.S.-Iran war fueled concerns about the economic outlook.
Data showed the annual consumer price inflation rose to 3.8 percent in April from 3.3 percent in March, exceeding economists' forecast of 3.7 percent and marking the highest reading since May 2023.
The tech-heavy Nasdaq Composite shed 0.7 percent and the S&P 500 dipped 0.2 percent while the narrower Dow inched up 0.1 percent.
European stocks ended lower on Tuesday as investors weighed political turmoil in the U.K. and U.S. President Trump's comments that the U.S.-Iran ceasefire is on "life support".
The pan-European STOXX 600 fell 1 percent. The German DAX slumped 1.6 percent, France's CAC 40 gave up 1 percent and the U.K.'s FTSE 100 finished marginally lower.
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