Indian Shares Set To Follow Global Peers Lower

(RTTNews) - Indian shares are seen opening on a sluggish note Thursday as Iran jitters persist and a broader rally in global chipmaking stocks ran out of steam.

Iran said communication channels with Washington remain open but there has been "no tangible progress" to end the war.

In contrast, U.S. President Donald Trump said progress in talks with Iran could come within days, with possible movement as early as the weekend.

Broadcom delivered a disappointing forecast for artificial intelligence chip revenue, raising fresh concerns about the durability of the artificial-intelligence rally that has driven global equities to record highs in recent weeks.

Benchmark indexes Sensex and Nifty recouped early losses on Wednesday but still ended down by 0.4 percent and 0.3 percent, respectively, as IT stocks succumbed to heavy profit booking after recent string of gains.

The rupee fell by 31 paise to close at 95.67 against the dollar after the U.S. Trade Representative proposed slapping 12.5 percent additional duties on 54 countries, including India, for forced-labor practices.

The new tariffs, if implemented, would enable U.S. President Trump to skirt limits on his tariffs imposed by the Supreme Court.

The Reserve Bank of India (RBI) announces it monetary policy decision on Friday, with most economists expecting no change in the benchmark interest rate.

But it seems more logical for the central bank to chart a different course and raise interest rates in view of a weakening rupee and rising inflation on the back of higher energy costs.

Foreign investors net sold shares worth Rs 5,617 crore on Wednesday, while domestic institutional investors net bought shares to the extent of Rs 5,741 crore, according to provisional data on the exchange.

Asian markets were deep in the red this morning as investors reacted to rising U.S.-Iran tensions and a weak forecast from Broadcom Inc.

The dollar eased but held near a two-month high. Gold rebounded to $4,470 an ounce on hopes for a resolution to the U.S.-Israeli war on Iran.

Brent crude futures fell below $97 a barrel after three consecutive sessions of gains. Some relief emerged after Israel and Lebanon agreed to a ceasefire following negotiation in Washington.

U.S. stocks ended lower overnight, with the latest skirmish between the U.S. and Iran, concerns over stretched valuations and shifting monetary policy expectations leading to profit taking after strong gains over the past week.

The U.S. and Iran exchanged strikes and the Gulf region witnessed a surge in hostilities, raising concerns about the durability of a fragile ceasefire.

Upbeat economic data helped limit overall losses to some extent, with the services sector expanding at an accelerating pace and private payrolls increasing more than expected in May.

The Fed's Beige Book report found that U.S. businesses endured another month of energy-driven price increases amid the Iran conflict.

The S&P 500 dropped 0.7 percent to snap a nine-day winning streak, while the Dow gave up 1.2 percent and the tech-heavy Nasdaq Composite declined 0.9 percent.

European stocks ended lower on Wednesday as fresh U.S.-Iran clashes coupled with no meaningful breakthrough in peace talks underscored the ongoing risks facing energy markets and Gulf shipping.

Fresh jitters over private credit markets, tariff worries and concerns about inflation and interest rates also weighed on markets.

The pan-European STOXX 600 fell 0.7 percent. The German DAX lost 1.3 percent, France's CAC 40 shed 0.7 percent and the U.K.'s FTSE 100 dipped 0.4 percent.