FX.co ★ Sensex, Nifty Seen Tad Lower On Weak Global Cues

Indian shares are set to open flat to slightly lower on Wednesday, influenced by weak signals from global markets.

Investors are likely to see major indices moving within a narrow range as they await the minutes from the Federal Reserve's recent monetary policy meeting and a speech by Fed Chair Jerome Powell at the Jackson Hole Economic Symposium for insights regarding potential U.S. interest rate cuts this year.

Current market sentiment, as reflected by CME's FedWatch tool, indicates a 69.5% probability of a 25 basis-point reduction in the Fed funds target rate at the September policy meeting, and a 30.5% chance of a larger 50 basis-point cut.

On Tuesday, benchmark indices Sensex and Nifty closed up by approximately half a percent each. Meanwhile, the rupee appreciated by 8 paise, ending the day at 83.79 against the dollar, supported by a weaker U.S. currency and declining crude oil prices.

This morning, Asian markets were broadly lower, with key indices in Hong Kong and Japan declining around 1%.

The U.S. dollar reached its lowest level of the year against the euro as 30-year U.S. yields fell to a two-week low. Gold prices traded close to the record high set on Tuesday, while oil continued its downward trend due to estimated increases in U.S. crude inventories.

In the U.S., stocks ended modestly lower overnight after achieving their longest rally this year, driven by easing recession concerns. Government debt yields fell broadly following a survey from the Philadelphia Fed, which indicated ongoing weakness in non-manufacturing activity in August.

The tech-heavy Nasdaq Composite dropped 0.3%, the S&P 500 declined by 0.2%, breaking an eight-day winning streak, and the Dow decreased by 0.2%.

European stocks ended their five-day winning streak on Tuesday, as a decline in energy stocks overshadowed investor optimism about potential rate cuts in the U.S. The pan-European STOXX 600 fell by 0.5%, the German DAX dipped by 0.4%, France's CAC 40 slid by 0.2%, and the U.K.'s FTSE 100 lost 1%.