Indian markets are poised for a slightly lower opening on Tuesday, influenced by oil prices trading near a two-month high. This surge is driven by escalating tensions in the Middle East and concerns surrounding the rapid commencement of the Atlantic hurricane season.
The oil & gas sector might attract particular attention as the Indian government has increased the windfall tax on petroleum crude from 3,250 rupees to 6,000 rupees per metric ton, effective from July 2.
Investors will also be digesting monthly auto sales figures and the deceleration in GST collections, reaching a three-year low in June.
On Monday, the Sensex and Nifty benchmarks both recorded gains of approximately 0.6 percent while the rupee depreciated by 11 paise, closing at 83.45 against the US dollar.
In the broader Asian markets, fluctuations were observed this morning driven by concerns over China's economic prospects, uncertainties regarding US Federal Reserve rate decisions, and apprehensions about the economic implications of the upcoming November US elections. The US Supreme Court's ruling granting former presidents "broad immunity" in a Washington case against Donald Trump also added to the cautious sentiment.
The dollar strengthened on the back of higher yields, gold saw slight increases, and oil prices continued to climb after an almost 2 percent rise in the previous US trading session.
Overnight, US stock markets ended higher. Manufacturing data revealed a contraction for the third consecutive month in June, with a drop in prices paid by manufacturers hitting a six-month low. These indicators bolstered expectations that the Federal Reserve might begin lowering interest rates by September. The Dow Jones Industrial Average inched up by 0.1 percent, the S&P 500 advanced by 0.3 percent, and the Nasdaq Composite, driven by tech stocks, surged by 0.8 percent.
European markets saw gains on Monday. The euro strengthened to its highest level since mid-June and the yield spread on French bonds narrowed significantly, reacting to initial French election results that showed a smaller-than-anticipated lead for the far-right. The pan-European STOXX 600 index rose by 0.3 percent. Meanwhile, the German DAX and the FTSE 100 each gained 0.3 percent and 1.1 percent, respectively, while the UK's FTSE 100 finished with marginal gains.
