Indian stocks are projected to open lower on Wednesday, with technology stocks likely to face significant losses due to substantial uncertainty around the U.S. interest rate outlook. Federal Reserve Chair, Jerome Powell, is set to testify before the House Financial Services Committee today and the Senate Banking Committee tomorrow. Analysts predict that Powell is likely to maintain his stance on not rushing to cut rates.
Benchmark indices Sensex and Nifty ended marginally lower on Tuesday, following three consecutive sessions of record-breaking highs. The rupee stabilized at 82.89 against the dollar. Bloomberg Index Services announced that Indian FAR (Fully Accessible Route) bonds would be incorporated into the Bloomberg EM Local Currency Government indices. This inclusion will occur on January 31,2025, and the bonds will constitute 10 percent of their full market value.
Asian stocks noted moderate losses this morning, while the dollar remained steady. Investors anxiously await the European Central Bank's rate decision and Powell's congressional testimony. Gold continued to trade near record highs, while oil stumbled for the third session in a row due to concerns about China's demand growth - the world's largest crude importer.
U.S. stocks plummeted, further extending losses from the previous session. This downward trend resulted from investors processing weak economic indicators while looking for direction from Powell's testimony. U.S. service industry growth slowed slightly in February, and new orders for manufactured goods fell more than expected in January. These effects have raised concerns about the health of the world's largest economy.
The tech-dominated Nasdaq Composite recorded a 1.7% drop, marking its worst single-day loss in three weeks. Similarly, the S&P 500 and the Dow each lost approximately 1%. European stocks also ended lower on Tuesday due to anxiety over China, which overshadowed optimistic business activity data indicating recovery in the Eurozone last month.
The pan-European STOXX 600 dropped 0.2%. The German DAX and France's CAC 40 slipped 0.1% and 0.3% respectively. Contrarily, the U.K.'s FTSE 100 ended marginally higher.
