Sensex, Nifty Seen Higher As Oil Sinks On Recession Worries

(RTTNews) - Indian shares look set to open a tad higher on Wednesday as investors react to positive economic data and a slump in oil prices on demand worries.

India's consumer price inflation eased for the second straight month in June, but remained above the central bank's tolerance band, official data showed.

Consumer prices climbed 7.01 percent year-over-year in June, following a 7.04 percent rise in May. That was just below the 7.03 percent increase expected by economists.

Separate data revealed that India's industrial output grew sharply by 19.6 percent on a yearly basis in May, much faster than the 6.7 percent increase seen in April, underpinned by strong growth across manufacturing, electricity and mining sectors. The growth was aided by a favorable base effect.

Brent crude futures plunged $7 on Tuesday to settle below $100 a barrel for the first time in three months amid dollar strength, recession fears and new COVID-19 curbs in China.

Oil prices were little changed in Asian trade after U.S. inventory data showed build-ups in crude oil and refined products.

Benchmark indexes Sensex and the Nifty fell around 1 percent each on Tuesday to extend losses for a second straight session, while the rupee closed 15 paise lower at 79.60 against the greenback after hitting a historic intra-day low of 79.66.

Asian markets were mostly higher in cautious trade this morning and the dollar steadied near 20-year highs ahead of U.S. inflation data due out later in the day.

U.S. stocks ended lower overnight as investors braced for a big week of economic data and company earnings reports.

The S&P 500 gave up 0.9 percent to extend losses into a third day as Treasury yield inversion stoked recession worries. The Dow dropped 0.6 percent and the tech-heavy Nasdaq Composite lost 1 percent.

European stocks erased initial losses to close higher on Tuesday as the euro bounced back after almost reaching parity with the U.S. dollar.

The pan European Stoxx 600 gained half a percent despite weak regional data, concerns about a worsening energy crisis in Europe and the emergence of a new, more infectious Covid-19 strain in several parts of the world.

The German DAX rose 0.6 percent, France's CAC 40 index added 0.8 percent and the U.K.'s FTSE 100 edged up 0.2 percent.