Sensex, Nifty Seen Opening On Flat Note

Indian shares are seen opening flat to slightly lower on Wednesday as investors fret about the impact of higher interest rates on economic growth.

The downside, if any, may remain limited after the government kept its borrowing plan unchanged for the second half.

Benchmark indexes Sensex and Nifty ended little changed on Tuesday despite weak cues from global markets.

Asian stocks traded mixed this morning, with Chinese and Hong Kong markets rising after data showed China’s industrial profits surged 17.2 percent from a year earlier in August, compared with a 6.7 percent decline in July and June’s fall of 8.3 percent.

The dollar extended rally to hover near levels not seen since November 2022 while gold held near one-month lows on interest-rate fears. Oil prices extended overnight gains on the prospect of tighter supplies.

U.S. stocks pulled back sharply overnight to reach their lowest closing levels in over three months on uncertainty about the Fed’s rate path and worries over a possible government shutdown.

In economic releases, a measure of consumer confidence hit a four-month low in September and sales of newly built homes fell in August – raising fears that the world’s largest economy could be headed for a recession.

In an interview with the Times of India, JPMorgan CEO Jamie Dimon warned investors to prepare for a worst-case scenario where the Fed lifts rates to 7 percent alongside stagflation.

Minneapolis Federal Reserve President Neel Kashkari also wrote in an essay that there is a 40 percent chance the Federal Reserve will have to push rates “meaningfully higher” to combat stubborn services inflation.

The S&P 500 plummeted 1.5 percent to close below 4,300 for the first time since June 9, while the Dow gave up 1.1 percent and the tech-heavy Nasdaq Composite plunged 1.6 percent.

European stocks fell for the fourth straight session on Tuesday amid worries about China’s economic recovery and interest rates staying elevated for longer.

The pan European STOXX 600 dropped 0.6 percent. The German DAX lost 1 percent and France’s CAC 40 shed 0.7 percent while the U.K.’s FTSE 100 finished marginally higher.