(RTTNews) – Indian shares may open on a weak note on Tuesday as enthusiasm over potential Federal Reserve rate cuts faded and caution set in ahead of the release of crucial U.S. inflation data as well as Nvidia quarterly results.
On the trade front, there seems to be no hopes for tariff relief as the U.S. officials have already cancelled the scheduled visit to India during August 25-29.
The Trump administration has officially issued a notice regarding the imposition of an additional 25 percent tariffs on Indian imports, with the punitive duties set to kick in at 12:01 am (EST) on August 27.
“No matter how much pressure comes, we will keep increasing our strength to withstand it,” Prime Minister Modi said at a public rally in Ahmedabad’s Nikol area and stressed that his government will never let harm come to small entrepreneurs, farmers, and livestock rearers.
Fitch Ratings said in a statement that the direct impact of higher U.S. tariff on Indian GDP will be modest as exports to the U.S. account for 2 percent of GDP, but tariff uncertainty will dampen business sentiment and investment.
Benchmark indexes Sensex and Nifty rose around 0.4 percent each on Monday as IT stocks surged on Fed rate cut hopes.
The rupee pared initial gains to settle 6 paise lower at 87.58 against the U.S. dollar, tracking a strong American currency and a recovery in crude oil prices.
RBI Governor Sanjay Malhotra said that the journey for the Indian rupee to become an international currency would be slow and take decades.
Foreign Institutional Investors were net sellers of shares to the extent of Rs. 2,466 crore on Monday while domestic Institutional investors bought shares worth a net Rs 3,178 crore, as per NSE provisional data.
Asian markets traded lower this morning while the dollar and U.S. Treasuries slid after U.S. President Donald Trump said on social media he was removing Lisa Cook from her position on the Fed’s board of directors, the latest in a series of attacks on the central bank’s independence.
Trump said there was enough evidence that Cook had made false statements on mortgage applications.
Gold edged up slightly to hover near $3,380 per ounce levels while oil prices dipped after a four-day advance ahead of the doubling of Indian tariffs.
U.S. stocks fell overnight as investors took profits after Friday’s big rally on Fed Chair Jerome Powell’s dovish surprise. The Dow shed 0.8 percent, the S&P 500 gave up 0.4 percent and the tech-heavy Nasdaq Composite eased 0.2 percent.
European stocks closed on a weak note on Monday as investors looked for more details about the U.S. – EU trade deal.
The pan European STOXX 600 declined 0.4 percent. The German DAX dipped 0.4 percent and France’s CAC 40 lost 1.6 percent while the U.K. markets were closed for a public holiday.
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