Sensex, Nifty Seen Flat To Slightly Lower At Open

(RTTNews) - Indian shares may open flat to slightly lower on Thursday, as risk sentiment soured amid expectations that the Fed will retain a sufficiently restrictive stance of policy for some time to cool prices.

U.S.-China tensions may also weigh after U.S. President Joe Biden vowed he would not hesitate to defend his country's interests against China in the backdrop of the downing of an alleged Chinese spy balloon by the U.S. air force.

China vowed to "firmly defend" its interests, but also said it was opposed to using competition to define the entire Sino-U.S. relationship.

Adani Group stocks would continue to remain in focus, with a Bloomberg report suggesting that the Group is planning to prepay a $500 million loan due next month to a group of foreign banks including Barclays Plc and Standard Chartered.

Benchmark indexes Sensex and Nifty jumped 0.6 percent and 0.8 percent, respectively on Wednesday as the RBI announced a smaller 25-basis points rate hike and said that domestic banks' exposure to the Adani Group is "not very significant". The rupee rose by 19 paise to close at 82.51 against the dollar.

Asian markets traded mixed this morning, with Chinese and Hong Kong stocks rising.

The dollar was little changed as investors looked ahead to U.S. inflation data due next week for additional clues on the rate outlook. Gold traded flat while oil extended gains for a fourth straight session.

U.S. stocks fell overnight after New York Fed President John Williams said interest rates may need to be kept at an elevated level for a "few years" to bring down inflation.

Governor Christopher Waller warned of interest rates going higher than expectations while Governor Lisa Cook said the big job gains in January with moderating wage growth increased her hopes for a "soft landing".

The Dow slipped 0.6 percent, the S&P 500 dropped 1.1 percent and the tech-heavy Nasdaq Composite tumbled 1.7 percent.

European stocks ended Tuesday's session broadly higher following Fed Chair Jerome Powell's comments that inflation has started easing.

The pan European STOXX 600 gained 0.3 percent. The German DAX rose 0.6 percent and the U.K.'s FTSE 100 added 0.3 percent, while France's CAC 40 index eased 0.2 percent.