(RTTNews) - Indian shares are seen opening on a cautious note on Wednesday as investors weigh persistent geopolitical risks and await key U.S. consumer and producer price readings for fresh insights into the Federal Reserve's next move.
Brent crude futures held above $89 a barrel, rising for the sixth consecutive session following mixed signals surrounding a potential deal between the U.S. and Iran.
Pakistan's defense minister Khawaja Asif said the U.S. and Iran are close to "some sort of an arrangement" and that "things are shaping up again in favor of a peace arrangement or a deal."
On the contrary, fresh attacks on ships in the Strait of Hormuz and Bab el-Mandeb raised worries that disruptions to global crude supplies could persist.
Shipping data showed traffic through the strait fell to just six vessels on Monday compared with a 10-day average of about 11 and roughly 125 to 140 vessels before the war.
Meanwhile, the central government's net direct tax collection rose 23.09 percent to over Rs. 8.11 lakh crore till Augst 10 in the current fiscal, driven particularly by strong growth in non-corporate tax and Securities Transaction Tax (STT) receipts, provisional data revealed.
Fitch Ratings has retained India's sovereign credit rating at 'BBB-' for the 20th year in a row but flagged risks of pressure on fiscal spending.
Benchmark indexes Sensex and Nifty fell around half a percent each on Tuesday and the rupee settled 0.15 percent lower at 95.4350 per ?dollar, reaching its weakest level in nearly two weeks amid stalled negotiations between Washington and Tehran regarding a peace agreement and the reopening of the Strait of Hormuz, a critical waterway for global energy supplies.
Foreign institutional investors remained net buyers of Indian equities for the second straight session on Tuesday, and net bought shares worth Rs 258.55 crore, while domestic institutional investors net bought shares to the extent of Rs 24.77 crore, according to provisional exchange data.
Asian markets were broadly lower this morning, even as South Korea's Kospi rose over 3 percent, led by major technology stocks.
The dollar was moving sideways in Asia trade while gold held at a two-month high above $4,400 an ounce.
Overnight, U.S. stocks closed lower after Iranian officials reiterated that the Strait of Hormuz would remain closed and negotiations could not resume unless the U.S. complied with a June framework agreement and compensated Iran for alleged violations.
The tech-heavy Nasdaq Composite dropped 0.6 percent and the S&P 500 fell 0.3 percent to extend losses for a second day running. The narrower Dow Jones shed 0.3 percent.
European stocks ended little changed near record highs on Tuesday as a breakdown in Middle East peace talks threatened Strait of Hormuz supply routes.
The pan-European STOXX 600 ended flat with a positive bias. While the German DAX rose 0.3 percent, France's CAC 40 slid 0.1 percent and the U.K.'s FTSE 100 eased 0.2 percent.
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