Sensex, Nifty Seen Opening Up On Firm Global Cues

Indian shares may open a tad higher on Wednesday, mirroring gains elsewhere across other global markets.

That said, volatility cannot be ruled out as investors await the RBI policy meet outcome.

Analysts say that a hike in the repo rate by 50 bps could cushion the rupee’s fall in the near term, but could also result in higher outflows from the debt market.

The World Bank on Tuesday cut India’s GDP growth forecast for 2022-23 to 7.5 percent from the earlier estimate of 8 percent, citing the impact of high inflation, supply chain disruptions and geopolitical tensions.

Benchmark indexes Sensex and the Nifty fell around 1 percent each on Tuesday, while the rupee fell by 8 paise to a record closing low of 77.71 against the dollar.

Asian markets rose this morning as China’s worst Covid-19 outbreak appeared to be ending and data showed Japan’s Q1 GDP fell less than initially thought.

The dollar steadied after a slight dip in line with U.S. yields overnight. Gold prices were little changed ahead of the ECB meeting and the release of U.S. inflation data, while oil inched higher ahead of data on U.S. oil inventories.

U.S. stocks shrugged off a weak start to settle higher overnight, setting aside a weak margin guidance from Target and the World Bank’s sharp cut to its global growth outlook for the year.

The Dow climbed 0.8 percent, the S&P 500 rallied 1 percent and the tech-heavy Nasdaq Composite advanced 0.9 percent.

European stocks ended Tuesday’s session broadly lower on Tuesday after data showed Germany’s factory orders fell for a third time in a row in April and the U.K. service sector suffered its worst performance for more than a year last month.

The pan European Stoxx 600 slid 0.3 percent. The German DAX shed 0.7 percent and France’s CAC 40 index both shed around 0.7 percent while the U.K.’s FTSE 100 eased 0.1 percent.