Sensex, Nifty Set For Tepid Open As Risk Aversion Deepens

Indian shares may follow global peers lower on Wednesday as geopolitical tensions and interest-rate worries spurred risk aversion.

Growth worries also returned to the fore, with ratings agency India Ratings and Research Projects saying that the growth momentum of the first half of FY23 is unlikely to sustain in the second half of the year.

Benchmark indexes Sensex and Nifty swung between gains and losses before closing marginally lower on Tuesday. The rupee fell by 6 paise to close at 82.79 against the dollar.

Asian markets followed Wall Street lower this morning amid worries that U.S. interest rates may remain at an elevated level for an extended period.

The Federal Reserve is scheduled to release the minutes of its latest monetary policy meeting later today, which could shed additional light on the outlook for interest rates.

Meanwhile, the announcement by Russia that it’s suspending participation in the strategic offensive arms treaty is deeply unfortunate and irresponsible,” U.S. Secretary of State Antony Blinken told reporters.

“Ukraine will never be a victory for Russia. Never,” U.S. President Joe Biden proclaimed during a historic speech in the gardens of the Royal Castle in Warsaw.

The dollar inched lower after an overnight rally, helping gold prices recover some ground. Oil prices traded lower on uncertainty about the demand outlook.

U.S. stocks fell the most in two months overnight and yields on 10-year Treasuries hit three-month peak amid ongoing worries about interest rates and gloomy forecasts from retailers Home Depot and Walmart.

Strong business activity data following recent robust data on retail sales, the labor market and manufacturing production led investors to anticipate higher rates for longer.

The Dow tumbled 2.1 percent and the S&P 500 shed 2 percent to hit their lowest closing levels in a month, while the tech-heavy Nasdaq Composite plunged 2.5 percent.

European stocks finished with modest losses on Tuesday as investors reacted to disappointing manufacturing activity from the Eurozone’s two largest economies.

Geopolitical concerns also weighed after U.S. President Joe Biden made a surprise visit to Ukraine’s capital Kyiv and Russian President Vladimir Putin said he is suspending Russia’s participation in a nuclear arms treaty with the U.S.

The pan-European STOXX 600 eased 0.2 percent. The German DAX and the U.K.’s FTSE 100 both slipped around half a percent while France’s CAC 40 index shed 0.4 percent.