Sensex, Nifty Seen Opening Tad Higher In Cautious Trade

(RTTNews) - Indian shares are seen opening higher on Tuesday, though the upside may remain capped by concerns surrounding a surging dollar and rising bond yields with yield on the benchmark ten-year U.S. note soaring to a twelve-year high.

In its economic outlook for Asia Pacific, S&P Global Ratings on Monday retained India's FY23 GDP forecast at 7.3 percent and said inflation is likely to remain above RBI's upper tolerance threshold of 6 percent till the end of 2022.

Meanwhile, Finance Minister Nirmala Sitharaman said the Indian currency is holding out well because of the strength of India's macro-economic fundamentals and the rate of fall of other currencies vis-à-vis dollar has been sharper than rupee.

Benchmark indexes Sensex and Nifty fell around 1.6 percent and 1.8 percent, respectively on Monday to extend losses for a third straight session, while the rupee slipped by 0.78 percent to end at 81.6225 against the greenback.

Asian markets traded mixed this morning and the dollar rally paused while oil prices rebounded after tumbling to near nine-months lows overnight.

Gold edged up but held close to a 2-1/2-year low on expectations of further policy tightening by the U.S. Federal Reserve.

U.S. stocks extended their losing streak to a fifty day on Monday as investors fretted over a combination of interest-rate, currency and economic risks.

The Dow fell 1.1 percent to fall into a bear market for the first time in more than two years as recessions fears grew.

The S&P 500 lost 1 percent to fell below its June closing low and the tech-heavy Nasdaq Composite shed 0.6 percent.

European markets settled broadly lower on Monday, as Britain's new chancellor Kwasi Kwarteng announced a sweeping package of tax cuts and ECB President Christine Lagarde said the central bank would continue increasing borrowing costs over the next several meetings despite a 'darkening' economic outlook.

The pan European Stoxx 600 declined 0.4 percent. The German DAX dipped half a percent and France's CAC 40 index slipped 0.2 percent while the U.K.'s FTSE 100 ended flat with a positive bias.