Indian Markets Set to Open Lower on Wednesday Following Rise in Bond Yields and Fall in Asian Markets
Indian markets are poised to open on a lower note on Wednesday, with the benchmark Nifty indicating a negative start. This comes as a result of a rise in bond yields and a fall in Asian markets ahead of US GDP data due tomorrow.
The Nasdaq made history on Tuesday by crossing the 17,000 mark for the first time ever, driven by gains in Nvidia. However, the S&P 500 closed only slightly higher, while the Dow ended lower as Treasury yields saw an increase. Investors are eagerly awaiting US inflation data this week, which could impact expectations for Federal Reserve rate cuts.
U.S. Treasury yields reached a near four-week peak on Wednesday, leading to a rise in Asia-Pacific counterparts and the dollar. This has put pressure on equities, as doubts arise about the timing and extent of Federal Reserve rate cuts.
Regional stock markets in Asia were mostly lower on Wednesday, with the exception of mainland China. Japan’s Nikkei, Australia’s benchmark, and Hong Kong’s Hang Seng all saw declines, while mainland blue chips experienced gains. MSCI’s broadest index of Asia-Pacific shares dropped by 0.8%.
On Tuesday, the Indian stock market ended lower for the third consecutive session, with the Sensex declining by 220.05 points and the Nifty 50 settling 44.30 points lower. Gift Nifty was also trading lower, indicating a negative opening for the Indian markets on Wednesday.
Oil prices rose on Wednesday in anticipation of major producers maintaining production cuts at an upcoming meeting. Gold prices, on the other hand, eased as traders adjusted their expectations of rate cuts by the US Federal Reserve.
The Indian rupee is expected to decline at the open on Wednesday, tracking the broader decline of Asian peers due to the rise in U.S. Treasury yields. Foreign institutional investors remained net buyers on May 28, while domestic institutional investors continued their buying spree.
Overall, the Indian markets are facing a challenging start on Wednesday, influenced by global economic factors and market trends. Investors will be closely watching developments in the US and Asia to gauge the impact on Indian markets in the coming days.
