Indian shares may open a tad higher on Wednesday after State Bank of India (SBI) said it would buy good quality assets worth Rs. 45,000 crore from NBFCs that are facing liquidity crunch, saying there is a good opportunity to expand its loan portfolio at attractive rates.
In another development, the Reserve Bank of India announced that it would inject Rs. 12,000 crore liquidity into the system through purchase of government bonds on October 11 to meet the festival season demand for funds.
As the session progresses, sentiment may be swayed by global cues, oil price movements and the direction of rupee.
The dollar slipped further from seven-week highs as U.S. Treasury yields came off from their recent highs.
Brent crude prices edged lower on global growth concerns after climbing 1.3 percent on Tuesday.
Benchmark indexes Sensex and the Nifty dropped around half a percent on Tuesday, as oil prices resumed their climb, raising concerns about inflation and capital outflows. The rupee fell by 32 paise to hit yet another record low of 74.39 per dollar.
Asian markets remain subdued as U.S. President Donald Trump renewed his criticism of the Federal Reserve and China stepped up its war of words with the U.S. The British pound strengthened against the dollar on expectations of a breakthrough in Brexit negotiations in the coming days.
U.S. stocks ended mixed for the second day running on Tuesday as yields on Treasuries retreated from a seven-year high and the IMF cut its global growth forecasts, citing the negative effect of recent tariff actions.
The Dow dipped 0.2 percent and the S&P 500 slid 0.1 percent while the tech-heavy Nasdaq Composite finished marginally higher.
European markets ended Tuesday’s session higher despite tensions between Rome and Brussels over Italy’s 2019 budget and deficit targets.
The pan-European Stoxx Europe 600 index gained 0.2 percent. The German DAX rose 0.3 percent, France’s CAC 40 index gained 0.4 percent and the U.K.’s FTSE 100 inched up 0.1 percent.
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