Sensex, Nifty May Open On Cautious Note After Hawkish Fed Update

(RTTNews) - Indian shares may open on a cautious note Thursday in the wake of weak global cues and a sharp rebound in oil prices overnight after four consecutive sessions of losses.

The dollar hit a two-week high and the 10-year U.S. Treasury yield revisited 4 percent as investors assess a hawkish update from the Federal Reserve.

Oil traded higher after climbing over 3 percent in the U.S. trading session on news of twin bomb blasts in Iran and the shutdown of the Sharara oilfield in Libya, which produces up to 300,000 barrels per day.

Traders also digested a statement from OPEC and their allies seeking oil market stability in 2024 and assessed the risks of further attacks on commercial ships in the Red Sea.

Asian markets followed Wall Street lower this morning after the Fed signalled prolonger higher interest rates.

U.S. stocks fell overnight to extend declines from the previous session as the latest Fed meeting minutes shed little light on when rate cuts might begin.

Projections provided by Fed officials at the December 12-13 meeting indicated they expect three quarter point rate cuts by the end of 2024.

Given an unusually elevated degree of uncertainty, participants also noted that rates could stay at current levels for longer than anticipated and that further increases are still possible.

On the data front, U.S. manufacturing sector contracted at a slower pace in December while job openings nudged down to the lowest in more than two years in November.

The tech-heavy Nasdaq Composite declined 1.2 percent to close lower for the fourth consecutive session, while the Dow and the S&P 500 both dipped around 0.8 percent.

European stocks fell on Wednesday amid uncertainty about the timing of potential interest-rate cuts. The pan-European STOXX 600 closed 0.9 percent lower, marking its worst session since Nov. 10.

The German DAX lost 1.4 percent, France's CAC 40 shed 1.6 percent and the U.K.'s FTSE 100 dropped half a percent.

Closer home, benchmark indexes Sensex and Nifty fell around 0.7 percent each on Wednesday even as Adani Group stocks rallied across the board post the Supreme Court's dismissal of SIT investigations into allegations raised by Hindenburg Research. The rupee gained 4 paise to close at 83.28 against the dollar.