Indian shares set to fall on rate-hike worries ahead of Fed minutes
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Indian shares are set to fall on Wednesday after strong macroeconomic data from the U.S. heightened fears of a prolonged high interest rate regime ahead of the release of the Federal Reserve's latest monetary policy meeting minutes.
India's NSE stock futures listed on the Singapore exchange were down 0.48% at 17,759.50 as of 8:08 a.m. IST.
U.S. markets fell after a survey showed that business activity in the largest economy rebounded to an eight-month high in February.
The data, which signalled resilience in the U.S. economy, heightened fears of the Fed maintaining higher interest rates for longer to tackle the rise in inflation.
Investors await the release of Fed minutes, due later in the day, for cues on the U.S. central bank's rate hike trajectory.
Investors also await the release of the Reserve Bank of India's February meeting minutes, due later in the day, for cues on its monetary policy. India's retail inflation rose above the upper limit of RBI's targeted 2%-6% band in January.
Asian markets declined, with the MSCI's broadest index of Asia-Pacific shares outside Japan losing 0.91%. [MKTS/GLOB]
Foreign institutional investors (FII) snapped a two-day selling streak and purchased a net 5.26 billion Indian rupees ($63.50 million) worth of equities on Tuesday. FII selling in Indian stocks has moderated in February, after rising to a seven-month high in the previous month.
Meanwhile, multiple media reports suggested the timing for the domestic equity market trade is likely to be extended to 5 p.m. IST from 3:30 p.m. The Securities and Exchange Board of India is yet to comment. The NSE has extended trading hours for interest rate derivatives to 5 p.m. IST from Feb. 23.
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($1 = 82.8330 Indian rupees)
