Sensex, Nifty Set To Follow Global Peers Lower As Fed Worries Mount

(RTTNews) - Indian shares may open notably lower on Wednesday, mirroring weak cues from global markets after Fed Chair Jerome Powell flagged sharper rate hikes to rein in stubbornly high inflation depending on incoming data.

Falling oil prices, optimism about India's growth prospects and reports suggesting that the Adani Group has prepaid loans worth Rs 7,374 crore could help limit the downside to some extent.

India's domestic economy is its primary engine of growth and the slowdown in economic activity late last year will only be temporary, said Moody's Analytics on Tuesday.

Indian markets were closed on Tuesday on account of the Holi festival.

Benchmark indexes Sensex and Nifty finished Monday's session up around 0.7 percent each, while the rupee neared one-month high before giving up some gains to close 5 paise higher at 81.92 against the dollar.

Asian markets followed Wall Street lower this morning as hawkish Fed bets lifted the dollar to a three-month high.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, printed the widest yield curve inversion in 40 years.

Gold hovered near one-week low while oil prices steadied in Asian trading after plummeting between 3.5 percent and 4 percent on Tuesday on rate hike jitters.

U.S. stocks tumbled overnight after Powell told lawmakers the U.S. central bank would be prepared to reaccelerate the pace of rate hikes if the economy grows too quickly.

The Dow lost 1.7 percent, the tech-heavy Nasdaq Composite shed 1.3 percent and the S&P 500 gave up 1.5 percent.

European markets ended Tuesday's session lower on expectations of bolder moves from the Fed and the ECB to fight inflation.

The pan European STOXX 600 declined 0.8 percent. The German DAX dropped 0.6 percent, France's CAC 40 index declined half a percent and the U.K.'s FTSE 100 slipped 0.1 percent.