Indian financial markets will remain closed on Wednesday on the occasion of Diwali-Balipratipada, with trading set to resume on Thursday in a holiday-shortened week.
On Monday, too, domestic financial markets were closed for regular trading, but with a special one-hour Muhurat trading window between 6:15 pm and 7:15 pm, with the next trading holiday scheduled on November 8 for Gurunanak Jayanti.
Equity benchmarks closed lower on Tuesday, driven by jittery Chinese markets after Xi Jinping's new leadership team stoked concerns that a more potent Party leadership will prioritise the state at the expense of the private sector.
While domestic bourses showed modest gains early on Tuesday, sparked by a Wall Street rally on hopes the Federal Reserve may be closer to the end of its aggressive rate hikes policy, lower Asian peers on Tuesday on weakness in Chinese shares, and the yuan, limited the appeal for domestic stocks.
The 30-share BSE Sensex index fell 287.70 points, or 0.48 per cent, to close at 59,543.96, and the broader Nifty-50 index declined 74.40 points, or 0.42 per cent, to end at 17,656.35, stalling a seven-day winning streak, including the gains in Monday's one-hour Muhurat trading window.
The rupee reversed gains from earlier in the session on Tuesday to end slightly lower at 82.73 against a softer dollar as the Chinese yuan hit a 15-year low.
Elsewhere in the broader global markets, US stock futures fell following disappointing earnings from tech giants Alphabet and Microsoft.Â
Still, Asian equities inched up on Wednesday as investors clung to optimism that the rate hike pace in the US and worldwide will start to slow.
US economic data released Tuesday showed a decline in consumer confidence and a slowing in home price inflation. There were also some indications that the Fed' aggressive interest rate hikes are beginning to cool the labour market.
"Continuing the theme of bad (economic) news is good news (for risk markets), US equities are continuing to bask in the afterglow of last Friday's hints of a step-down in the pace of Fed tightening," Ray Attrill, Head of FX Strategy at National Australia Bank in Sydney, wrote in a note.
The dollar sank against key rivals to a level that was close to a three-week low as new evidence of the US economy's deterioration fueled expectations of a less aggressive Fed.
After incoming British Prime Minister Rishi Sunak promised to lead the country out of an economic crisis on Tuesday, the pound remained near its six-week high set at that time.
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