FX.co ★ Sensex, Nifty Set To Follow Asian Peers Higher

Indian shares are poised to recover on Tuesday, buoyed by a revival in Asian markets following a historic downturn and a rise in U.S. stock futures after a three-day decline.

However, volatility is expected to persist due to apprehensions about a potential U.S. recession and escalating tensions in the Middle East.

On Monday, benchmark indices Sensex and Nifty each dropped around 2.7% amid a global sell-off. The rupee hit a record low, closing at 83.85 per dollar, influenced by the unwinding of yen carry trades.

This morning, Asian markets showed broad gains, with Japan's Nikkei surging over 9% and South Korea's Kospi rising by 3%, driven by bargain hunting in technology stocks following significant drops in valuations over recent weeks. The yen ended its five-day rally, gold remained steady above $2,400 per ounce, and oil prices surged by over 1% in Asian trading amid fears that an expanding Middle East conflict could disrupt supplies.

Heightened tensions are anticipated as Israel and the U.S. brace for potential escalation, following Iran and its regional allies' vows of retaliation for the deaths of Hamas and Hezbollah leaders.

Overnight, U.S. stocks suffered significant losses as recession concerns and a negative shift in sentiment within the technology sector overshadowed data indicating a rebound in the U.S. services sector activity from a four-year low in July.

The tech-heavy Nasdaq Composite plunged by 3.4%, the S&P 500 dropped 3% to hit three-month lows, and the Dow fell by 2.6%.

European markets also faced pressure, hitting a six-month low on Monday due to fears of decelerating U.S. growth, weak economic data from the eurozone, and intensified tensions in the Middle East.

The pan-European STOXX 600 declined by 2.2%, Germany's DAX fell by 1.8%, France's CAC 40 decreased by 1.4%, and the U.K.'s FTSE 100 dropped by 2%.