Indian Shares Set To Fall As Wall Street Extends Losses

(RTTNews) - Indian shares look set to open sharply lower on Wednesday, as investors fret about aggressive Fed tightening and await comments from Fed officials, including Chair Jerome Powell, for additional clues on inflation and rate outlook.

Worries over a looming energy crisis and recession in Europe may also keep underlying sentiment cautious.

The European Central Bank meets on Thursday, with economists expecting another outsized rate hike to fight soaring inflation.

Meanwhile, India's monetary policy will "remain watchful, nimble-footed and calibrated" going forward, Reserve Bank of India (RBI) Governor Shaktikanta Das said at an event as new data released by the central bank suggested a revival in consumption.

Separately, Moody's retained India's sovereign rating at Baa3 with a stable outlook, saying global challenges are unlikely to derail the country's economic recovery from the pandemic.

Benchmark indexes Sensex and the Nifty ended a choppy session marginally lower on Tuesday, while the rupee fell by 2 paise to close at 79.80 against the dollar.

Asian stocks fell broadly this morning, the dollar extended its rally and Treasury yields held gains as downside risks to economic outlook increased due to Europe's worsening energy crisis and COVID-19 lockdowns in China.

Crude dropped under $86 a barrel on demand worries while gold slipped below $1,700 an ounce.

U.S. stocks fell overnight as trading resumed after Monday's Labour Day recess.

The Dow dipped 0.6 percent, the tech-heavy Nasdaq Composite shed 0.7 percent and the S&P 500 gave up 0.4 percent as benchmark U.S. Treasury yields jumped to their highest levels since June on the back of strong services activity data.

European markets closed mostly higher on Tuesday after China pledged to make renewed efforts to boost its COVID-hit economy.

The pan European Stoxx 600 gained 0.2 percent. The German DAX climbed 0.9 percent, while France's CAC 40 index and the U.K.'s FTSE both edged up around 0.2 percent.