Indian Shares Set To Join Global Selloff Amid Inflation And Middle East Concerns

(RTTNews) - Indian shares are seen opening sharply lower on Monday as investors weigh weak global cues and escalating Midde East tension against strong domestic GDP data as well as the Indian government's decision eliminating the 12.5 percent long term capital gains tax on foreign institutional investment in government bonds.

The Indian economy logged robust growth in the March quarter despite geopolitical tensions, official data showed Friday.

GDP grew 7.8 percent on a yearly basis in the January to March quarter, outpacing economists' forecast of 7.2 percent on strong domestic demand and government expenditure.

Meanwhile, with an aim to attract foreign capital, the government on Friday announced that it would exempt capital gains tax on investments made by foreign institutional investors in government securities.

Global bond yields surged and the U.S. dollar jumped to a two-month high amid signs the U.S. Federal Reserve may not cut borrowing costs anytime soon and that it might instead raise rates later this year against a backdrop of high inflation.

Crude prices surged over $3 a barrel this morning after Israel struck Hezbollah targets in Beirut's southern suburbs over the weekend and Iran retaliated by launching a volley of missile strikes against Irael.

U.S. President Donald Trump has asked Irael not to retaliate, saying it would jeopardize the ongoing negotiations for a peace deal to end the three-month long conflict.

Asian markets were deep in the red, with technology stocks bearing the brunt of the selling.

Gold was subdued at $4,313 an ounce, holding a decline after tumbling nearly 5 percent last week to its lowest level in more than two months on concerns about inflation and interest rates.

U.S. stocks slumped on Friday, wiping out nearly $2 trillion in market value, as a surprisingly strong jobs report added to fears that the Federal Reserve will keep interest rates higher for longer.

The yield on the two-year Treasury note climbed to a 15-month high of 4.16 percent as data showed non-farm payroll employment shot up by 172,000 jobs in May while economists had expected an addition of 85,000 jobs.

The jobless rate held steady at 4.3 percent and job figures for March and April were revised up in a sign of resilient labor market, despite economic headwinds from the Iran war.

The tech-heavy Nasdaq Composite plummeted 4.2 percent, marking its biggest single-day drop since April 2025 as major investment funds continued to pull money out of AI and microchip companies. The S&P 500 shed 2.6 percent and the Dow gave up 1.4 percent.

European stocks closed mostly lower on Friday amid concerns stemming from Broadcom's outlook and uncertainty over Middle East peace efforts.

The pan-European STOXX 600 fell 0.3 percent. The German DAX dipped 0.8 percent and France's CAC 40 eased 0.3 percent while the U.K.'s FTSE 100 finished marginally higher.