Indian Shares Set To Follow Asian Peers Lower

Indian shares look set to open a tad lower on Friday amid a weakening rupee and renewed concerns over the Covid-19 situation in the country.

The overall trend remains down for the rupee after the Reserve Bank of India (RBI) struck to a loose monetary policy and announced a Rs. 1 trillion bond-buying plan to keep a lid on long-term interest rates.

India has recorded a massive surge of 131,893 Covid-19 cases in the last 24 hours, with Prime Minister Narendra Modi warning that the situation is very grim in some states.

Benchmark indexes Sensex and the Nifty ended well off their day’s highs on Thursday as investors weighed concerns over the second wave of coronavirus infections in the country against dovish signals from the Federal Reserve.

The rupee settled 11 paise down at 74.58 against the U.S. dollar, extending losses for the fourth straight session.

Asian markets remain broadly lower this morning even as Treasury yields fell after the release of softer-than-anticipated U.S. labor market data. Gold edged up on dollar weakness.

Oil traded near $60 a barrel after Saudi Arabia defended the OPEC+ plan to increase output and said the alliance was nimble enough to change course if necessary.

U.S. stocks rose overnight after Fed Chair Jerome Powell downplayed the risk of inflation, arguing that upward pressure on prices will be temporary and the central bank would react if inflation expectations start “moving persistently and materially” above a target threshold.

The tech-heavy Nasdaq Composite index jumped 1 percent, while the S&P 500 gained 0.4 percent and the Dow inched up 0.2 percent.

European markets ended Thursday’s session on a firm note as traders cheered upbeat data out of the U.S., Europe and Asia and reacted positively to the minutes of the Federal Reserve’s March meeting.

Meanwhile, minutes from the ECB’s recent meeting showed policymakers debated a smaller increase in bond purchases and agreed to front-load the buying this quarter on condition it could be cut later if conditions allow.

The pan European Stoxx 600 advanced 0.6 percent. The German DAX edged up 0.2 percent and France’s CAC 40 index rose 0.6 percent, while the U.K.’s FTSE 100 climbed 0.8 percent, buoyed by optimism over easing lockdown restrictions in Britain.