Sensex, Nifty Set To Extend Losses Amid Global Selloff

Indian shares are likely to open lower on Friday as risk aversion prevails due to renewed Middle East tensions, Fed Chair Jerome Powell’s cautious remarks on further rate hikes and a surge in oil prices over the $90-a barrel mark.

There are signs that the Israel-Hamas war is spreading. U.S. troops have been repeatedly attacked in Iraq and Syria in recent days since the conflict broke out on Oct.7, U.S. officials said on Thursday.

A U.S. Navy ship in the Red Sea on Thursday shot down missiles and drones that had been fired by Iran-backed Huthi rebels in Yemen.

Hamas and Russian President Vladimir Putin “represent different threats but they share this in common: they both want to completely annihilate a neighboring democracy,” U.S. President Joe Biden said in a televised addressed to the nation.

Benchmark indexes Sensex and Nifty cut early losses to end slightly lower on Thursday, extending losses for a second consecutive session. The rupee ended little changed at 83.25 against the dollar.

Asian markets were deep in the red this morning, with benchmark indexes in Australia, New Zealand and South Korea falling 1-2 percent.

Chinese and Hong Kong markets were seeing modest losses after the People’s Bank of China left benchmark lending rates unchanged, as widely expected.

The dollar was broadly up supported by elevated bond yields. Gold hurtled toward the $2,000-an-ounce level while oil rose about 1 percent to extend overnight gains as Israel prepares for a ground invasion of war-torn Gaza.

U.S. stocks fluctuated before closing firmly in the red overnight and Treasury yields hit 16-year highs after Fed Chair Jerome Powell warned that inflation is “still too high” and additional monetary policy tightening may be needed.

Economic reports painted a mixed picture, with jobless claims falling to a nine-month low last week while a measure of existing home sales dropped to a 13-year low in September.

The Dow gave up 0.8 percent, the S&P 500 shed 0.9 percent and the tech-heavy Nasdaq Composite lost 1 percent.

European stocks hit a seven-month low on Thursday as a string of disappointing earnings updates added to worries over rising bond yields and the escalating Israel-Hamas war.

The pan European STOXX 600 fell 1.2 percent. The German DAX eased 0.3 percent, France’s CAC 40 slipped 0.6 percent and the U.K.’s FTSE 100 declined 1.2 percent.