- Indian markets to open cautiously amid mixed global trends and high crude prices
- US Treasury 10-year yield hits highest level since 2007, closing at 5.00 percent
- Wall Street ended lower with Dow, S&P 500, and Nasdaq all posting declines
The Indian stock market benchmark indices, Sensex and Nifty 50, are expected to see a cautious opening on Wednesday, following a mixed trend in global markets even as surging crude oil prices and a sharp rise in the 10-year U.S. Treasury yield, which reached its highest level in nearly two decades, weighed on sentiment.
The trends on Gift Nifty also signal a muted start for the Indian benchmark indices, Nifty 50 and Sensex, today. The Gift Nifty was trading around 23,221 level, a discount of nearly 3 points from the Nifty futures' previous close.
Market participants will watch out for the pivotal US Federal Reserve policy announcement due later today. The FOMC is expected to hike interest rates by 25 basis points — its first interest rate hike in over three years.
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Here are five key factors to know ahead of the opening of the Indian stock market today:
Asian Markets
Asian markets traded mixed on Wednesday amid cautiousness over elevated crude oil prices. Japan's Nikkei 225 fell 0.05%, while the Topix rose 0.82%. South Korea's Kospi gained 0.84%, while the Kosdaq dropped 1.28%. Hong Kong's Hang Seng index futures indicated a higher opening.
Wall Street
US stock market ended lower on Tuesday, as a spike in Treasury yields and soaring crude oil prices weighed on sentiment.
The Dow Jones Industrial Average declined 328.09 points, or 0.63%, to 52,093.11, while the S&P 500 fell 34.25 points, or 0.45%, to 7,585.73. The Nasdaq Composite closed 204.84 points, or 0.78%, lower at 25,981.57.
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US Treasury Yields
The benchmark US Treasury yield rose to the highest in almost two decades. The yield on the 10-year US Treasury rose as much as five basis points to 5.04% on Tuesday, the highest since 2007, before closing the session at 5.00%.
Middle East War
The US-Iran war continued to spread across the Middle East, with Saudi Arabia intercepting a Houthi drone south of Mecca. Explosions were also reported on Iran's Qeshm Island. Meanwhile, in the Strait of Hormuz, Iranian vessels attempted to seize a US unmanned surface vessel, reports said. It prompted a forceful response from American forces.
Crude Oil Prices
Crude oil prices fell after an unexpected build in US crude inventories but remain above $100 a barrel amid supply risks after Saudi Arabia suspended oil loadings at its Yanbu port following an attack on its East-West pipeline to the Red Sea. Brent crude futures declined 0.53% to $108.17 a barrel, while US West Texas Intermediate futures fell 0.82% to $104.96 a barrel.
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