Indian Shares Seen Little Changed At Open

(RTTNews) - Indian shares are seen opening on a flat note on Tuesday as traders return to their desks after a long holiday weekend.

Potential gains, if any, may remain limited amid renewed West Asia tensions and ahead of the Federal Reserve's interest-rate decision on Wednesday, with markets pricing in a 95 percent chance of an interest-rate increase.

Closer home, India's retail inflation accelerated further in August amid higher food and fuel costs, according to data from the National Statistical Office.

Consumer price inflation rose to 4.82 percent in August from 4.45 percent in July while economists had expected inflation to rise to 4.80 percent. This was the highest inflation rate since December 2024.

Wholesale prices also rose in August, driven by higher fuel and manufactured food prices. The wholesale price index registered an annual growth of 9.92 percent in August compared to 9.78 percent in July.

Asian markets were broadly lower this morning after U.S. semiconductor shares sold off overnight on concerns about artificial intelligence (AI) regulation amidst growing public alarm over its potential dangers.

The benchmark 10-year U.S. Treasury yield hovered around 5 percent in early Asian trade, marking the highest level since October 2023.

The dollar held near a two-week high on hawkish Fed bets while gold was firm at $4,306 an ounce after falling over 1 percent in the previous session.

Brent crude futures rose over 1 percent toward $107 a barrel on supply disruption concerns.

Iran claimed that a supertanker caught fire after striking naval mines while attempting to pass through a restricted area south of the Strait of Hormuz. Tehran also rejected renewed peace talks with the U.S. until its demands are met.

Elsewhere, Ukrainian President Volodymyr Zelenskyy said that Ukraine is prepared to take "de-escalatory steps" if Russia does the same, contradicting U.S. President Trump's claim earlier that both had agreed not to strike each other's energy targets.

U.S. stocks ended well off their day's lows overnight as crude oil prices gave back some ground after soaring nearly 5 percent in early trade following President Donald Trump's claim that Russia and Ukraine have agreed to stop attacking each other's energy targets.

Trump also reiterated that Iran wants to "make a deal, quickly and badly" and that "oil is flowing through the Hormuz Strait."

Fears of a tightening oil market rattled investors after Saudi Arabia closed a critical pipeline that bypasses the Strait of Hormuz following a drone attack.

Additionally, a highly anticipated meeting in Oman between Iran and Gulf States was postponed at the last minute in the absence of conditions conducive to a constructive dialogue.

The tech-heavy Nasdaq Composite ended 0.6 percent lower, after having tumbled as much as 1.3 percent earlier as industry leaders called for a slowdown in the pace of AI development.

President Trump dismissed the warning, saying a slowdown was not needed and would jeopardize America's lead in AI over China.

The S&P 500 dropped half a percent and the narrower Dow eased 0.3 percent. European stocks fell broadly on Monday, with tech stocks coming under selling pressure on concerns over rising bond yields and risks to AI safety.

The pan-European STOXX 600 dipped half a percent. The German DAX fell half a percent and France's CAC 40 shed 0.8 percent while the U.K.'s FTSE 100 rose 0.4 percent.