Sensex, Nifty Seen Opening Higher As Trade Tensions Ease

(RTTNews) - Indian shares may open higher on Wednesday as optimism grew over a potential easing of trade tensions between the U.S. and China.

Investors may also react favorably to reports suggesting that the White House is nearing general agreements with Japan and India on trade.

Both U.S. Vice-President JD Vance and Indian Prime Minister Narendra Modi have touted progress in talks for a trade deal between the two countries.

The two leaders also noted continued efforts toward enhancing cooperation in energy, defense and strategic technologies, among others.

On the flip side, the International Monetary Fund slashed the global growth forecasts for this year and next, citing the potential impact of the trade tariffs imposed by U.S. President Donald Trump and cautioned against significant adverse effect on the world economy if the current trade tensions persist.

According to the IMF's latest World Economic Outlook report, the global economy is set to grow 2.8 percent this year and 3.0 percent next year, significantly less than the 3.3 percent expansion that the lender projected for both years in January.

Benchmark indexes Sensex and Nifty ended slightly higher on Tuesday after the government imposed a 12 percent provisional safeguard duty for 200 days on five steel product categories to protect domestic manufacturers.

The rupee fell by 7 paise to settle at 85.20 against the greenback, snapping a five-day winning streak.

Asian markets were broadly higher this morning and the dollar strengthened for a second straight session while gold retreated after U.S. President Donald Trump said he had no intention of firing Federal Reserve Chair Jerome Powell.

Oil extended overnight gains because of new Iran sanctions and industry data showing a drop in U.S. crude oil inventories.

U.S. stocks surged overnight as investors cheered upbeat earnings news from the likes of 3M and GE Aerospace and comments from Treasury Secretary Scott Bessent that the tariff standoff with China cannot be sustained by both sides and there will be de-escalation in the "very near future".

At the same time, he suggested any formal agreement may take time. "If we walked out of negotiations in two or three years with something that looked like that, I'd consider it a huge win."

Separately, President Donald Trump also expressed openness to negotiation and hinted at a partial reduction in tariffs but warned that the U.S. will set the terms of trade if China refuses to reach a deal.

The Dow and the tech-heavy Nasdaq Composite both rallied 2.7 percent to end higher for the first time in five days while the S&P 500 jumped 2.5 percent.

European stocks recovered from an early slide to end higher on Tuesday after ECB President Christine Lagarde said the disinflation process in the euro area was "nearing completion."

The pan European STOXX 600 gained 0.3 percent. The German DAX rose 0.4 percent, while France's CAC 40 and the U.K.'s FTSE 100 both added around 0.6 percent.