(RTTNews) - Indian shares are seen opening on a muted note despite Wall Street's overnight rally.
A cautious undertone may prevail as investors await the outcome of peace talks between the U.S. and Iran due to resume again today in Doha and the release of the U.S. June nonfarm payrolls report due on Thursday for fresh insights into whether the Federal Reserve will keep interest rates elevated for an extended period.
Meanwhile, India's industrial production grew at a faster than expected pace in May, driven by a significant increase in electricity and gas production, preliminary data from the statistics ministry showed.
The industrial production index rose 5.1 percent year-on-year following a 4.9 percent increase in April. Economists had forecast a 4.7 percent gain.
Benchmark indexes Senex and Nifty ended a choppy session down around half a percent each on Monday as trading resumed after a long holiday weekend.
The rupee pared early gains to settle 9 paise lower at 94.54 against the U.S. dollar as a flare-up in geopolitical tensions and U.S. rate hike jitters hit investors' risk appetite.
Foreign institutional investors net sold shares worth Rs 1,350 crore on Monday, while domestic institutional investors net bought shares to the tune of Rs 2,801 crore, according to provisional exchange data.
Asian markets were mixed this morning despite China's official manufacturing PMI returning to expansion in June and non-manufacturing activity expanding for a second month.
The Japanese yen fell to a 40-year low versus the dollar as investors factored in a slow pace of interest-rate increases by the Bank of Japan compared with growing expectations of a rate hike by the Federal Reserve.
Gold tumbled more than 1 percent to hover below $3,960 an ounce on inflation concerns and Fed rate hike bets. Brent crude futures slipped toward $72 a barrel, paring gains from the previous session.
Tanker traffic through the Strait of Hormuz has declined after the U.S. and Iran traded new strikes over the weekend.
A top Iranian official reiterated the country's determination to maintain control over maritime traffic moving through the Strait of Hormuz even if Oman opts not to participate.
U.S. stocks rose sharply overnight, with a flurry of corporate deal activity and gains in tech stocks after recent selling adding momentum to the broader market rally.
The Dow rose 0.6 percent to set a new record closing high above 52,000 as weekend hostilities between the United States and Iran eased. The S&P 500 rallied 1.2 percent and the tech-heavy Nasdaq Composite surged 2.1 percent to snap five-session losing streaks.
European stocks ended little changed on Monday as investors weighed the durability of a fragile interim peace deal between the United States and Iran as well as possible interest rate hikes by central banks.
The pan European Stoxx 600 ended flat with a positive bias. The German DAX, the U.K.'s FTSE 100 and France's CAC 40 all slid by 0.2 percent.
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