Indian Shares Seen Opening Higher As Fed Rate Hike Concerns Ease

(RTTNews) - Indian shares look set to open higher on Monday, tracking firm cues from global markets as investors trimmed bets on an aggressive policy tightening cycle by the U.S. Federal Reserve.

This week will mark the beginning of the quarterly earnings season, with TCS and DMart among the prominent companies scheduled to announce their results.

The release of final HSBC Services PMI and Composite PMI readings for September as well as RBI's monetary policy meeting will be in the spotlight as the week progresses.

The RBI's policy stance, inflation outlook and growth projections may provide important clues on the near-term trajectory of domestic interest rates.

Benchmark indexes Sensex and Nifty tumbled 2.7 percent and 3.1 percent, respectively last week, extending declines to eight consecutive weeks and marking their longest weekly losing streak in 25 years as a result of persistent foreign institutional selling amid elevated crude oil prices and surging global bond yields.

Asian stocks were broadly higher this morning, with markets in mainland China and South Korea closed for holidays. Japan's Nikkei index jumped more than 2 percent, led by gains in technology stocks.

The U.S. dollar edged lower and bond yields steadied while gold traded firm at $4,160 an ounce ahead of the release of ISM Services PMI later in the day and the minutes of the September FOMC meeting on Wednesday.

Brent crude futures fell nearly 1 percent toward $101 a barrel after gaining almost 5 percent last week.

Amid rising risks to global supplies, major OPEC+ members agreed over the weekend to leave production quotas unchanged next month.

Yemen's government forces said Sunday they had struck Houthi targets in the capital Sanaa and Taiz in the southwest, deepening the conflict ravaging one of the world's poorest nations and the wider region.

U.S. stocks closed higher on Friday as data showing much weaker-than-expected job growth in September reduced expectations for a potential Federal Reserve rate hike later this month.

Data showed non-farm payroll employment rose by 29,000 jobs in September after an increase of a downwardly revised 133,000 jobs in August, while economists had expected employment to increase by 85,000 jobs.

Wage pressures were lower than expected. The unemployment rate ticked up to 4.2 percent from 4.1 percent in August while economists had expected it to remain unchanged. Separate data showed factory orders rose less than expected in August.

Bond yields moved higher as hawkish comments from Dallas Fed President Lorie Logan calling for an increase in short-term borrowing costs by at least another 50 basis points offset softer jobs data.

While the tech-heavy Nasdaq Composite surged 1.2 percent to a new record high, the S&P 500 advanced 0.7 percent and the narrower Dow gained half a percent.

European stocks rebounded on Friday after hitting multi-month lows in the previous session.

The pan-European STOXX 600 climbed 0.8 percent after the release of softer U.S. jobs data and an announcement by the G7 group of nations that they would undertake a coordinated release of 100 million barrels of diesel and other reserves through the International Energy Agency.

The German DAX rallied 1.2 percent, France's CAC 40 rose 0.8 percent and the U.K.'s FTSE 100 added 0.3 percent.