FX.co ★ Sensex, Nifty Likely To Extend Losses On Rate Worries, Middle East Tensions

Indian stocks may continue to experience a downward trend this Friday as a result of encouraging US economic statistics and assertive remarks from several Federal Reserve officials, dampening expectations of an interest rate cut.

Tensions in the geopolitical sphere might also burden markets following statements by Israel's Prime Minister, Benjamin Netanyahu, asserting the country's independent decision-making in responding to Iran's unprecedented airstrikes. The Iranian President also warned against even the smallest Israeli invasion, promising severe retaliation.

Further adding to the tension, Hezbollah took responsibility for firing missiles and deploying drones at a military institution in northern Israel - an action purportedly in response to Israel's killing of its fighters.

Major Indian indexes including the Sensex and the Nifty saw approximately 0.6 percent and 0.7 percent declines respectively on Thursday. This constituted their fourth consecutive day of losses. Meanwhile, the Rupee reached a record closing low of 83.5375 against the dollar.

Asian markets were largely in negative territory this morning, with indexes in Australia, South Korea, Hong Kong, and Japan witnessing a drop of 1-3 percent.

The US dollar had a constricted trading range while Treasury bonds remained steady after falling on Thursday. Gold traded up more than 1 percent breaking the $2400 per ounce benchmark, while oil prices surged around 4 percent following reports of Israeli missile attacks on a location near the Iranian city of Isfahan.

US stocks presented a mixed picture as yields on two-year Treasury bonds rose towards the 5 percent mark following hawkish comments from Federal Reserve officials and data showing unexpectedly quick growth in manufacturing activity in Philadelphia in April, coupled with a strong labor market.

The S&P 500 fell 0.2 percent and the technology-focused Nasdaq Composite dropped half a percent, marking its fifth consecutive day of losses and hitting its lowest closing levels in nearly two months. Conversely, the Dow managed a slight increase.

European stocks enjoyed an uptick on Thursday predicated on predictions that the European Central Bank (ECB) may move towards slashing interest rates soon, regardless of the Federal Reserve's actions. The pan-European STOXX 600 saw a marginal increase of 0.2 percent, closely followed by Germany's DAX and the UK's FTSE 100 which both rose last round about 0.4 percent, while France's CAC 40 managed a 0.5 percent gain.