Senex, Nifty Set To Follow Global Peers Lower

(RTTNews) - Indian shares are likely to open on a sluggish note Tuesday, mirroring weak cues from global markets as investors fret about U.S. President-elect Donald Trump's protectionist policies and the outlook for interest rates.

Focus also shifted to tense U.S.-China relations after the U.S. Treasury Department said it was recently hacked by a Chinese state-sponsored actor, leading to unauthorized access to government employees' workstations and unclassified documents.

Closer home, the rising frequency of weather events such as heat waves and unseasonal rains continue to pose risk for food inflation dynamics in the country, the Reserve Bank of India said in its Financial Stability Report.

Benchmark indexes Sensex and Nifty fell around 0.6 percent and 0.7 percent, respectively on Monday amid concerns about foreign fund outflows, a strengthening dollar and rising bond yields.

The rupee hit an intra-day low of 85.59 before settling 4 paise lower at 85.52 against the dollar.

Domestic financial institutions bought shares worth Rs. 2,174 crores on a net basis Monday, while foreign portfolio investors offloaded shares worth Rs. 1,893 crores, according to NSE provisional data.

Asian markets followed Wall Street lower this morning, though mainland Chinese and Hong Kong stocks bucked the weak trend to post marginal gains after the release of mixed PMI data.

China's official manufacturing purchasing managers' Index (PMI) eased to 50.1 in December from 50.3 in the previous month while the non-manufacturing PMI rose to 52.2 from 50.0 in November.

The dollar index was firm on the last trading day of the year and was set for strong annual gains.

Gold was marginally higher above $2,600 per ounce and was on track for its best annual performance in more than a decade.

Oil edged higher to hover near a five-week high in Asian trade but headed for a small annual loss amid thin year-end trading.

U.S. stocks ended lower for a third day running overnight due to end-of-year tax positioning and concerns over valuations.

In economic news, factory sector activity in the Chicago area slowed a bit more quickly at the end tail-end of 2024, while pending home sales increased for a fourth month to reach a 21-month high in November, separate reports showed.

The Dow lost 1 percent, the tech-heavy Nasdaq Composite tumbled 1.2 percent and the S&P 500 gave up 1.1 percent.

European stocks closed lower on Monday as Spanish inflation surpassed forecasts in December and ECB Governing Council member Robert Holzmann said the ECB may delay its next interest rate cut.

The pan European STOXX 600 dipped half a percent. The German DAX and the U.K.'s FTSE 100 both fell by 0.4 percent while France's CAC 40 shed 0.6 percent.