Indian shares are expected to open flat to slightly higher on Tuesday, despite mixed global signals, heightened geopolitical tensions, and ongoing uncertainty regarding the timing and pace of potential Federal Reserve rate cuts.
Due to the Lok Sabha elections in Mumbai, Indian markets were closed on Monday. Experts foresee continued market volatility in the short term, driven by Foreign Institutional Investor (FII) sell-offs amid persisting election-related uncertainties.
During the week ending May 18, FIIs sold shares valued at a net Rs 10,650 crore in the cash segment, bringing the total net selling for the current month to Rs 33,625 crore.
The benchmark indices, Sensex and Nifty, concluded a special trading session on Saturday with modest gains.
Economically, HSBC Manufacturing and Services PMI Flash figures for May are scheduled for release on May 23, and data on foreign exchange reserves for the week ending May 17 will be available on May 24.
In Asia, markets took a breather this morning after seven consecutive days of gains. Gold prices remained mostly steady after reaching a record high the previous day.
Despite rising geopolitical tensions ahead of an upcoming OPEC+ meeting on supply, the oil market exhibited signs of weakness.
In the United States, stocks closed with varied outcomes overnight as Treasury yields rose following hawkish statements from Federal Reserve officials. The tech-focused Nasdaq Composite rose by 0.7 percent, closing at a record high in anticipation of Nvidia’s much-anticipated earnings report. The S&P 500 saw a marginal uptick, while the Dow Jones Industrial Average dipped by 0.5 percent after surpassing the 40,000 mark on Friday.
European stocks ended Monday on a positive note as commodity prices hit record highs amid elevated geopolitical tensions and optimism surrounding China's economic recovery. The pan-European STOXX 600 increased by 0.2 percent, while Germany's DAX and France's CAC 40 both gained 0.4 percent. The U.K.'s FTSE 100 closed flat but exhibited a positive bias.
