Sensex, Nifty Poised For Tepid Start On Growing Risk Aversion

(RTTNews) - Indian shares are set to open sharply lower on Monday, tracking rising bond yields on concerns that central banks' efforts to combat elevated inflation will push the global economy into a recession.

Volatile trading is expected ahead of an RBI policy meeting and monthly F&O expiry due this week.

The monetary policy committee (MPC) of the Reserve Bank of India (RBI) is widely expected to hike the repo rate by 50 basis points after the end of a three-day policy meeting on Friday.

The focus would be on the rupee and foreign fund flows after the Indian currency weakened for the eighth consecutive session on Friday to close at a record low of Rs. 80.99 to the greenback.

Asian markets traded mostly lower this morning, with Chinese and Hong Kong stocks seeing modest gains amid speculation that selling pressure may ease after a three-month setback.

Gold hit a 2-1/2-year low as the dollar index scaled a fresh peak since 2002 ahead of a slew of U.S. data due this week, including reports on U.S. GDP, new home sales and consumer confidence.

The focus would also be on a batch of speeches from Federal Reserve officials including Bullard, Bowman and Powell.

Oil prices extended losses in Asian trade after falling sharply to eight-month lows last week on recession worries.

U.S. stocks tumbled on Friday to suffer losses for the fourth day running amid concerns over aggressive monetary policy tightening and foreign currency turmoil.

The Dow dropped 1.6 percent to its lowest closing level since November 2020, while the S&P 500 shed 1.7 percent and the tech-heavy Nasdaq Composite declined 1.8 percent to hit three-month closing lows.

European stocks slumped on Friday to hit multi-month lows amid heightened recession risks, with the British government unleashing historic tax cuts and huge increases in borrowing.

The pan European Stoxx 600 plunged 2.3 percent. The German DAX and the U.K.'s FTSE 100 both fell around 2 percent while France's CAC 40 index plummeted 2.3 percent.