Indian shares seen opening higher after selloff; higher oil, Fed caution to cap gains

Indian shares are set to open higher on Wednesday, with the benchmarks poised for a technical rebound after the Nifty 50 closed at a five-month low in the previous session. GIFT Nifty ​futures were trading around 23, 218. 50 points as of 7: 54 a. m. IST, indicating a positive ‌start for the Nifty 50 index, which closed at 23, 118. 60 on Tuesday. Both the Nifty 50 and Sensex are in oversold territory, so a technical bounce cannot be ruled out from current levels. However, the overall trend ​remains bearish, said Vatsal Bhuva, a technical analyst at LKP Securities. Analysts expect markets to ​remain subdued amid elevated crude prices, heightened activity in the primary market and ahead of ⁠the US Federal Reserve’s rate decision later in the day. Three IPOs, including those of Hero Motors, ​SS Retail and Jindal Supreme India, will open for subscription on Wednesday, bringing the total number of ​active IPOs to four. The benchmarks opened about 0. 8% higher on Tuesday, but reversed those gains to end more than 1% lower each. “Crude oil remains the dominant overhang for domestic markets. Even in the previous session, markets failed ​to sustain the opening gains, succumbing to broad-based selling as elevated oil and firm Treasury yields ​weighed on investor sentiment, ” said Ponmudi R, CEO of Enrich Money. Brent crude traded at around $108. 3 a barrel after ‌closing ⁠at a near four-month high on Tuesday, amid intensifying supply risks following Saudi Arabia’s suspension of oil loading at its Yanbu port and cuts to oil shipments to Europe. Other Asian markets were muted ahead of the Fed policy decision, due after Indian market hours, with most investors expecting, a rate hike. Higher U. S. rates ​make emerging markets such as ​India less appealing ⁠to global investors, while also impacting growth in sectors such as Indian IT, which derives a significant share of its revenue from the U. S. Foreign institutional investors recorded net outflows ​of 29. 78 billion rupees ($310. 37 million) from domestic markets on Tuesday, their highest ​since September 4. Domestic ⁠institutional investors were net buyers, with inflows of 26. 86 billion rupees, as per provisional data, from the NSE.

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