Sensex, Nifty Set To Follow Asian Peers Higher

(RTTNews) - Indian shares look set to rebound on Tuesday as Asian markets recovered from a historic sell-off and U.S. stock futures rose after a three-day rout.

That said, volatility could remain high due to fears of a possible U.S. recession and concerns over an escalating Middle East conflict.

Benchmark indexes Sensex and Nifty fell around 2.7 percent each on Monday amid a global sell-off. The rupee ended at a record closing low of 83.85 per dollar due to unwinding of yen carry trades.

Asian markets were broadly higher this morning, with Japan's Nikkei climbing over 9 percent and South Korea's Kospi adding 3 percent as technology stocks saw some bargain hunting after a sharp drop in valuations over the past few weeks. The yen snapped a five-day gain, and gold was little changed above $2,400 per ounce while oil prices jumped more than 1 percent in Asian trade on fears that a spreading Middle East conflict could hit supplies.

Israel and the U.S. are bracing for significant escalation after Iran and its regional allies vowed retaliation for the deaths of Hamas and Hezbollah leaders.

U.S. stocks ended with deep losses overnight as recession worries and a widespread shift in sentiment around the technology sector overshadowed data showing a rebound in the U.S. services sector activity from a four-year low in July.

The tech-heavy Nasdaq Composite plunged 3.4 percent and the S&P 500 plummeted 3 percent to hit three-month lows while the Dow slumped 2.6 percent.

European stocks hit a six-month low on Monday, with fears over slowing U.S. growth, some weak eurozone economic data and heightened Middle East tensions weighing on markets.

The pan European STOXX 600 fell 2.2 percent. The German DAX dipped 1.8 percent, France's CAC 40 shed 1.4 percent and the U.K.'s FTSE 100 tumbled 2 percent.