Sensex, Nifty Set To Follow Global Peers Lower

(RTTNews) - Indian shares are likely to open lower on Wednesday as investors react to weak global cues and look ahead to the MPC decision on interest rates due Friday for direction.

Analysts say that the Reserve Bank of India (RBI) will likely keep the benchmark repo rate unchanged at 6.5 percent for the fourth consecutive time but there could be divergence within the Committee as to the stance.

Benchmark indexes Sensex and Nifty fell around half a percent each on Tuesday, reflecting weak global sentiment.

The rupee ended 17 paise lower at 83.21 against the dollar, hit by a stronger dollar and elevated Treasury yields in international markets.

Asian stocks traded at 11-month lows this morning and gold hovered near seven-month lows, while the Japanese yen strengthened on speculation of government intervention to combat a sustained depreciation of the currency.

Oil prices were down slightly after setting higher in the U.S. trading session overnight.

U.S. stocks fell sharply overnight to reach four-month lows and the 10-yeat Treasury yield hit a 16-year high, as the August job openings survey signaled a tight labor market, keeping the risks tiled toward another Fed rate hike.

The Dow dropped 1.3 percent and the S&P 500 lost 1.4 percent while the tech-heavy Nasdaq Composite plunged 1.9 percent to extend the late summer selloff.

European stocks ended Tuesday's session notably lower on concerns over higher interest rates and the gloomy economic outlook.

The pan European STOXX 600 fell 1.1 percent. The German DAX gave up 1.1 percent, France's CAC 40 shed 1 percent and the U.K.'s FTSE 100 declined half a percent.