Indian shares are seen opening sharply lower on Thursday, mirroring weak cues from global markets after the U.S. Federal Reserve forecast fewer interest-rate cuts next year.
Benchmark indexes Sensex and Nifty fell around 0.6 percent each on Wednesday and the Indian rupee hit a new record low for the third consecutive day due to continued foreign fund outflows and Trump’s tariff threats.
Foreign investors offloaded shares worth Rs 1,316.81 crore on a net basis Wednesday, while domestic institutional investors bought shares worth Rs 4,084.08 crore, according to provisional data from NSE.
Asian markets were deep in the red this morning, the yield on benchmark U.S. Treasury yields touched a seven-month high, the dollar index jumped to a two-year high and gold held below $2,600 per ounce after the Fed cautioned about upside inflation risks.
Analysts have warned that policies proposed by U.S. President-elect Donald Trump, including plans for tax cuts and widespread import tariffs, could put upward pressure on prices and keep interest rates higher for longer.
Oil prices also traded lower in Asian trade as the dollar surged amid the Fed’s shift in policy guidance.
Tariff worries remained on investors’ radar after reports emerged that U.S. authorities are considering a ban on China’s TP-Link Technology Co over potential national security concerns.
The Japanese yen hovered near a one-month low against the dollar as investors braced for the looming Bank of Japan’s interest-rate decision and comments from BOJ Governor Kazuo Ueda.
There are minimal expectations for a rate hike, with investors looking for clues on the timing and pace of rate hikes next year.
U.S. stocks succumbed to heavy selling pressure overnight after the Fed delivered a 25-bps rate cut as expected but revised its projections to signal just two interest rate cuts next year compared to the four previously forecast, citing stubbornly high inflation.
The Dow plummeted 2.6 percent to extend its losing streak to ten straight sessions and hit its lowest closing level in over a month.
The S&P 500 slumped 3 percent to a one-month closing low and the tech-heavy Nasdaq Composite plunged 3.6 percent.
European stocks ended mostly higher on Wednesday after the release of U.K. and Eurozone inflation data and ahead of the Fed’s final rate decision of the year.
The pan European STOXX 600 rose 0.2 percent to end higher for the first time in four days.
The German DAX finished marginally lower while France’s CAC 40 gained 0.3 percent and the U.K.’s FTSE 100 edged up marginally.
Market Analysis
Sensex, Nifty Set For Gap-down Opening After Wall Street Selloff
2024-12-19 02:33:37
