Indian Shares Seen Lower As IMF Cuts Growth Forecast

Indian shares look set to open a tad lower on Wednesday after the International Monetary Fund (IMF) slashed the growth forecast for India for the second time this year.

GDP is expected to contract 10.3 percent in the financial year 2020-21, down from the 4.5 percent de-growth predicted back in June as the coronavirus pandemic continues to spread and claim lives.

The IMF, however, said that India will deliver an impressive recovery in the next fiscal with 8.8 percent growth, higher than the 6 percent growth rate predicted in June.

Earnings will continue to remain in focus, with Infosys, India’s second largest IT services firm, expected to report around 4 percent growth in dollar revenue for the September quarter.

Wipro, the fourth largest IT services company, on Tuesday reported a 3.2 percent sequential growth in consolidated profit for the quarter ended September.

Benchmark indexes Sensex and the Nifty ended marginally higher on Tuesday while the rupee ended down 7 paise at 73.35 against the U.S. dollar.

Asian markets are trading mostly lower this morning as uncertainty around a U.S. stimulus package continued and Eli Lilly joined Johnson & Johnson in halting its trials of a Covid-19 vaccine over safety concerns.

U.S. House Speaker Nancy Pelosi rejected a $1.8 trillion relief proposal from the White House, claiming the proposal “falls significantly short of what this pandemic and deep recession demand.” She still hopes a deal can be reached.

Senate Majority Leader Mitch McConnell has announced the Senate will vote on a more limited stimulus bill once lawmakers return from recess on October 19.

The dollar held gains and gold hovered below $1,900 while oil held steady in Asian trade.

U.S. stocks edged lower overnight as a stalemate in stimulus negotiations continued, a string of earnings reports from companies ranging from airlines

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