(RTTNews) - Indian shares are seen opening a tad lower on Thursday as investors react to a hawkish Federal Reserve policy and look forward to the signing of the U.S.-Iran peace agreement, which may rapidly unlock Iranian oil exports, channel funds into its economy and begin a phased rollback of sanctions in exchange for nuclear curbs.
Both the U.S. and Iran have released the full text of a recently finalized memorandum of understanding, which seeks to extend a ceasefire announced in April by another 60 days to allow the two sides to negotiate a final truce.
The final agreement will confirm the permanent end of the war on all fronts, including in Lebanon.
U.S. President Doanld Trump, however, threatened to resume attacks and kill Iranian officials if they failed to honor their commitments.
Benchmark indexes Sensex and Nifty rose around half a percent each on Wednesday to extend gains for a fourth consecutive session as crude oil prices fell to pre-conflict levels amid the easing of geopolitical tensions in West Asia.
The Indian rupee settled 10 paise higher at 94.50 against the dollar, rising for the fourth consecutive session.
Foreign investors net bought shares worth Rs 102 crore on Wednesday, while domestic institutional investors net bought shares to the extent of Rs 1,561 crore, according to provisional data on the exchanges.
Asian markets were mixed in lackluster trade this morning amid concerns that the U.S. Federal Reserve may hike interest rates later this year.
The U.S. dollar clung to a more than two-month high while Brent crude futures fell nearly 2 percent toward $78 a barrel, extending its decline toward the lowest levels since early March after the IEA warned of a potential supply glut.
Gold jumped 1.6 percent to $4,326 an ounce, recouping losses from the previous session.
Overnight, U.S. stocks tumbled while Treasury yields climbed as the Federal Reserve left interest rates unchanged as widely expected, but the latest set of projections suggested there could be at least one increase to its main rate this year.
After removing "forward guidance" from the policy statement, Kevin Warsh said in his first press conference as Fed Chair that it was no longer useful and that he would consider a revamp of how the Fed communicates with financial markets and U.S. households and businesses.
He asked investors to react to incoming reports on inflation, the job market and other economic indicators rather than trying to predict the Fed's next move.
He also chose not to submit the famous "dot plot", saying it's not helpful in the conduct of policy.
Earlier in the day, data showed retail sales increased more than expected in May. Pending home sales grew 4.8 percent in the month, signaling stronger housing demand.
The tech-heavy Nasdaq Composite lost 1.3 percent, the S&P 500 declined 1.2 percent and the Dow dipped 1 percent.
European stocks eked out modest gains on Wednesday to extend gains for a fifth straight session as investors awaited details of the U.S.-Iran peace agreement.
The pan-European STOXX 600 gained half a percent. While the German DAX and the U.K.'s FTSE 100 both edged up by 0.1 percent, France's CAC 40 slipped 0.2 percent.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
