Sensex, Nifty Seen Lower At Open, Macro Data In Focus

Indian shares are seen opening flat to a tad lower on Wednesday, tracking tepid global cues.

The downside may remain capped to some extent after data showed India’s fiscal deficit stood at 6.7 percent of GDP in 2021-22 on higher tax receipts and prudent expenditure, lower than 6.9 percent estimated in the national budget tabled in February.

Analysts say that the improved fiscal performance will reduce the extent of fiscal roll back required in the current fiscal year compared to the last.

India’s core sector output expanded 8.4 percent in April, the fastest pace in six months, while the country’s GDP growth further slowed during the fourth quarter, hit by Omicron-led restrictions in January, separate reports showed.

GDP in the January-March period grew 4.1 percent versus 5.4 percent in the third quarter. The growth in the financial year 2021-22 stood at 8.7 percent.

Benchmark indexes Sensex and the Nifty fell around 0.6 percent and half a percent, respectively on Tuesday to snap a three-day winning streak, while the rupee slipped 12 paise to close at 77.66 against the dollar.

Asian markets traded mixed this morning after a private survey showed activity in China’s manufacturing sector contracted for the third straight month in May, though at a slower pace.

The dollar traded firm and Treasuries extended a decline while gold hit a near two-week low after U.S. President Joe Biden reiterated the Federal Reserve’s “laser focus on addressing inflation” ahead of the November midterms.

Oil prices edged up in Asian trade as China ended its COVID-19 lockdown in Shanghai.

U.S. stocks closed lower overnight and U.S. Treasury yields rose sharply as the EU’s Russian oil ban lifted crude prices to new highs, raising fresh concerns about inflation and aggressive policy tightening.

The Dow dipped 0.7 percent, the S&P 500 shed 0.6 percent and the tech-heavy Nasdaq Composite eased 0.4 percent.

European stocks fell for the first time in four sessions on Tuesday, with sentiment hit by hawkish comments from a Federal Reserve official and higher-than-expected Eurozone inflation print.

The pan European Stoxx 600 declined 0.7 percent. The German DAX gave up 1.3 percent and France’s CAC 40 index fell 1.4 percent while the U.K.’s FTSE 100 edged up 0.1 percent.