Indian shares look set to open a tad higher on Wednesday after six days of losses. That said, renewed geopolitical worries, hawkish comments from Fed Chair Janet Yellen, rising oil prices and continued sell-off by foreign portfolio investors may serve to keep underlying sentiment somewhat cautious.
The Asian Development Bank (ADB) on Tuesday slashed its forecast for India's growth for the current fiscal by 0.4 percent to 7 percent, but said that India's ambitious reform agenda will lead to higher long-run growth for the economy.
In another development, India ranked 40th out of 137 countries on the World Economic Forum's 2017 global competitiveness ranking - one spot lower than last year's.
Meanwhile, a finance ministry statement said that the government has collected Rs 90,669 crore as goods and service tax (GST) in August, 3.6 percent less than what was collected in July.
Benchmark indexes Sensex and the Nifty fell for a sixth consecutive session on Tuesday, although markets ended well off their day's lows, tracking a positive trend in Europe.
The rupee fell steeply for a second day running to end down 35 paise at a fresh six-month low of 65.45 per dollar amid rising prospects of a Fed rate hike in December.
Asian stock markets are mixed this morning and the dollar retained overnight gains after Fed Chair Janet Yellen said a gradual and cautious approach to rate hikes will be appropriate amid uncertainty surrounding inflation.
With geopolitical concerns lingering, investors await comments from central bankers in Canada, the U.K. and the U.S. for further direction. Also, a Republican tax-cut plan is expected to be unveiled later today.
The Japanese yen weakened against the dollar and the euro hovered near a five-week low while oil prices gained ground on data showing an unexpected drop in U.S. inventories.
U.S. stocks ended mixed overnight as housing and consumer confidence data disappointed investors and Fed Chair Yellen cautioned against moving too slowly on interest rates.
The Dow slid 0.1 percent to extend losses for the fourth straight session, while the S&P 500 closed marginally higher and the Nasdaq Composite edged up 0.2 percent.
European markets also ended Tuesday's session on a mixed note as the euro sank to a 10-week low against the pound in the wake of geopolitical risks such as North Korea, the German election and the Catalonian independence referendum as well as U.K. Prime Minister Theresa May's comments on Brexit negotiations.
The pan-European Stoxx Europe 600 index closed marginally lower at 384.03. France's CAC 40 index closed marginally higher and the German DAX edged up 0.1 percent while the U.K.'s FTSE 100 dropped 0.2 percent.
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