Indian shares may open little changed on Tuesday after Federal Reserve Chair Jerome Powell signaled that he was in no hurry to make further interest-rate cuts.
Action may be subdued ahead of a market holiday on Wednesday on account of Gandhi Jayanti.
Investors may also react to a SEBI meeting outcome, a slew of economic data and heightened tensions in the Middle East.
Capital market regulator SEBI has approved the introduction of a new asset class targeting risk-oriented investors and also endorsed the liberalized Mutual Funds Lite (MF Lite) framework, focusing on passively managed schemes.
On the data front, Indias infrastructure output shrank for the first time in over three years in August and the current account deficit widened to $9.7 billion in Q1 of 2024-25, while the countrys fiscal deficit in April-August period of the current financial year narrowed from the corresponding period last year, separate reports revealed.
On the geopolitical front, the Israeli military has commenced a limited, localized operation against Hezbollah targets in southern Lebanon, raising concerns about regional stability.
Benchmark indexes Sensex and Nifty tumbled around 1.5 percent and 1.4 percent, respectively on Monday while the rupee dropped 9 paise to close at 83.79 against the dollar on apprehensions that a plausible increase in Yen interest rate can reduce cross country investments in equity.
Asian stocks were mixed this morning, with Chinese and Hong Kong markets closed for holidays. Japans Nikkei rallied nearly 1.5 percent after falling 4.8 percent on Monday.
Oil held steady and gold was just below a record high touched last week as investors looked ahead to the release of U.S. labor data later in the week for more clarity on the pace of U.S. rate cuts.
U.S. stocks struggled for direction before closing higher overnight amid optimism that the economy is headed for a soft landing and that the Fed will continue cutting rates.
The Dow finished marginally higher, and the S&P 500 rose 0.4 percent to reach record closing highs as Fed Chair Jerome Powell said the economy remains on solid footing.
He signaled that two more quarter-percentage-point cuts to the benchmark fed funds rate are possible this year but the downward path for rates is not on a preset course.
The tech-heavy Nasdaq Composite added 0.4 percent to extend its winning streak to two straight months.
European stocks fell on Monday after auto majors Stellantis and Volkswagen issued profit warnings.
The pan European STOXX 600 fell 1 percent. The German DAX shed 0.8 percent, Frances CAC 40 lost 2 percent and the U.K.s FTSE 100 gave up 1 percent.