Sensex, Nifty Set To Drift Lower Amid Global Selloff

Indian shares look set to open notably lower on Monday as investors brace for additional Fed rate hikes to come.

As recession fears mount, investors may also seek direction from GDP, core sector output and monthly auto sales data due this week for directional cues.

Benchmark indexes Sensex and Nifty fell 2.5 percent and 2.7 percent, respectively last week to record their world weekly decline in eight months in the wake of weak global cues and FII outflows.

Asian markets traded mostly lower this morning, with benchmark indexes in Japan and South Korea falling over 1 percent.

U.S. Treasury Secretary Janet Yellen told Reuters on Saturday that new U.S. data showing an unexpected jump in inflation in January signals that the fight against inflation “is not a straight line” and more work is needed.

The dollar hovered near a seven-week high and U.S. Treasury yields rose while gold hovered near two-month lows on rate hike jitters. Oil traded slightly higher after Russia announced plans to deepen oil supply cuts.

U.S. stocks fell sharply on Friday and logged their biggest weekly losses in more than two months, as higher January inflation and strong consumer spending figures raised fresh concerns about the outlook for interest rates. Traders largely shrugged off improved housing and consumer sentiment data.

The Dow gave up 1 percent to reach a two-month closing low and the S&P 500 dropped 1.1 percent to its lowest closing level in over a month while the tech-heavy Nasdaq Composite gave up 1.7 percent.

European stocks closed Friday’s session firmly in the red as signs of stubbornly high inflation in the world’s largest economy stoked fears the Fed will have to raise interest rates further and for an extended period.

The pan-European STOXX 600 fell 1 percent. The German DAX lost 1.7 percent and France’s CAC 40 index tumbled 1.8 percent while the U.K.’s FTSE 100 eased 0.4 percent.