Sensex, Nifty To Open Lower On US Debt Default Worries

Indian shares may open a tad lower on Monday as the United States moved closer to the deadline to avoid a debt default.

Global cues, movements in dollar and bond yields as well as FII flows may sway sentiment as the week progresses.

On the earnings front, Ashok Leyland, BHEL, BPCL, Hindalco, NMDC, Oil India, ONGC and Sun Pharma are among the prominent companies that will unveil their quarterly earnings results this week. Volatility may be high this week due to the upcoming F&O expiry.

Meanwhile, market regulator SEBI has proposed drastic changes to price band formulation for stocks traded on the derivatives segments of the NSE and BSE to strengthen volatility management and minimize information asymmetry among market participants.

Asian markets traded mixed this morning ahead of debt ceiling talks between U.S. President Joe Biden and House Republican Speaker Kevin McCarthy later in the day.

Earlier today, China’s central bank kept its benchmark lending rate steady at historical lows.

The Federal Open Market Committee is scheduled to release its last meeting minutes on May 24.

Gold traded flat in Asian trade while oil edged up, helped by a softer dollar and supply cuts from Canada and OPEC+ producers.

U.S. stocks ended lower on Friday after rising sharply over the two previous sessions.

Concerns around the economy deepened after Republican negotiators walked out of a meeting over raising the U.S. debt ceiling and Fed Chair Jerome Powell said that inflation continued to be “far above” the central bank’s target.

Regional bank stocks fell after Treasury Secretary Janet Yellen reportedly told executives that more mergers may be necessary.

The Dow shed 0.3 percent, the tech-heavy Nasdaq Composite eased 0.2 percent and the S&P 500 slid 0.1 percent.

European stocks rose on Friday as investors monitored U.S. debt ceiling talks and reacted to a slew of regional data.

The pan European STOXX 600 gained 0.7 percent to reach a one-year high. The German DAX climbed 0.7 percent to scale a new peak, while France’s CAC 40 added 0.6 percent and the U.K.’s FTSE 100 edged up 0.2 percent.

Market Analysis