Indian Shares Seen Little Changed As US Midterm Election Results Trickle In

(RTTNews) - Indian shares are seen opening flat to lower on Wednesday after a strong four-session rally. That said, a weakening dollar in overseas markets, falling U.S. Treasury yields and steadier oil prices may help limit losses, if any.

Investors will react to the U.S. midterm election results that could reshape the balance of power in Washington for the next two years of President Donald Trump's stay in the White House.

Early trends show Democrats leading in several Republican-held districts, raising the prospects of a political deadlock in Washington and calmer policy environment.

The possible scenario of "Blue Wave" is generally regarded as being negative for the U.S. dollar and positive for U.S Treasuries.

Benchmark indexes Sensex and Nifty soared around 1.6 percent each on Tuesday to extend gains for a fourth consecutive session.

The rupee settled 15 paise higher at 94.75 against the U.S. dollar, rising for the third straight day on the back of foreign fund inflows into the domestic equity market.

Foreign institutional investors (FIIs) net bought shares worth Rs. 6,836.81 crore on Tuesday while domestic institutional investors (DIIs) net sold shares worth Rs. 3,678.85 crore, according to provisional exchange data.

Asian markets were mixed this morning despite U.S. technology stocks rebounding overnight. Japan's Nikkei was down nearly 3 percent as markets opened after a public holiday.

South Korea's Kospi was down almost 2 percent due to investor anxiety over AI industry and unresolved geopolitical risks.

The U.S. dollar dropped against all of its Group-of-10 peers while U.S. Treasuries gained across the curve as the first vote counts from the midterm elections favored the Democrats.

Gold ticked up to $3,940 an ounce in early Asian trade as oil extended declines for a third day running, helping ease inflation concerns.

Brent crude futures were down 0.4 percent at 103.18 a barrel after seeing sharp swings in the previous session amid uncertainty over the U.S.-Iran peace talks.

Qatar said it saw hope for an interim deal as both the U.S. and Iran evaluate new proposals put forward by mediators, despite fresh U.S. strikes and continued threats to shipping through Hormuz.

However, Iran's national security chief indicated in a social media post that Washington's response to Iran's demands for reopening the Strait of Hormuz and resuming peace talks was insufficient.

U.S. stocks ended mixed overnight as Treasury yields rose on the back of stronger-than-expected employment data and focus shifted to the midterm elections that will determine control of Congress.

Oil prices slipped to multi-week lows despite skepticism about a near-term resolution to the Iran conflict.

While a three-day sell-off in technology shares came to a halt, Apple shares fell nearly 2 percent after the company warned about rising memory costs and slower services growth.

On the economic front, job openings and hiring showed slight signs of improvement in September while layoffs fell to the lowest level in 1-1/2 years, adding to signs of resilience in the labor market.

Separate set of data showed new orders for U.S. factory goods increased more than expected in September.

The S&P 500 gained 0.4 percent and the tech-heavy Nasdaq Composite surged 0.8 percent while the narrower Dow dropped 0.4 percent.

European stocks closed lower on Tuesday on doubts over a potential Middle East deal after the U.S. military carried out limited strikes on Iran's Qeshm Island.

The pan-European STOXX 600 fell 0.6 percent. The German DAX dipped half a percent, France's CAC 40 eased 0.3 percent and the U.K.'s FTSE 100 lost 1.1 percent.