Indian Shares Seen Lower As Investors Await RBI Policy Outcome

(RTTNews) - Indian shares are seen opening lower on Wednesday after two days of gains amid diminished expectations for another Federal Reserve interest-rate hike in October.

The Reserve Bank of India will announce its bi-monthly monetary policy later today, with the central bank expected to hike its key repo rate by 25 basis points after maintaining a status-quo so far this calendar year.

Benchmark indexes Sensex and Nifty rose around 1 percent each on Tuesday to extend gains for a second consecutive session, tracking firm cues from global markets.

The rupee fell by 8 paise to close at 96.43 against the U.S. dollar due to sustained foreign fund outflows amid uncertainties over a U.S.-Iran deal.

Foreign institutional investors offloaded shares worth Rs 2,961.30 crore on a net basis on Tuesday, while domestic institutional investors net bought shares to the extent of Rs 5,088.92 crore, according to provisional exchange data.

Asian markets were mostly lower in cautious trade this morning despite a record-setting rally on Wall Street overnight ahead of the earnings season.

The U.S. dollar held losses as stress in European bond markets abated and investors looked forward to the release of the Federal Reserve's September meeting minutes as well as speeches by Fed officials for additional clues on the path forward.

Gold was subdued below $4,150 an ounce while Brent crude futures rose nearly 1 percent toward $102 a barrel, extending gains from the previous session amid persistent risks to Middle East energy flows after Iran increased the pace of attacks on tankers in the Strait of Hormuz in recent days.

U.S. stocks rose overnight as semiconductor chipmakers continued to benefit from a robust outlook, crude prices steadied and the 10-year yield pulled back from a 24-year high on data showing a wider than expected August trade deficit.

The tech-heavy Nasdaq Composite gained half a percent and the S&P 500 added 0.6 percent to reach new record closing highs while the Dow advanced half a percent.

European stocks closed higher on Tuesday as investors assessed mixed regional data and comments from ECB Governing Council member Olli Rehn on inflation and borrowing costs.

Euro zone bond yields eased after a recent rally as Rehn said the ECB would make interest rate decisions meeting by meeting, based on incoming information.

The pan-European STOXX 600 gained half a percent. While the German DAX surged 0.8 percent, France's CAC 40 and the U.K.'s FTSE 100 both edged up by 0.4 percent.