FX.co ★ Sensex, Nifty To Open On Cautious Note Amid Weak Asian Cues

On Monday, Indian stocks are expected to commence with caution, reflecting uncertainties in other Asian markets. Recently, foreign portfolio investors have resorted to sustained offloading of shares due to polling apprehensions and the anticipation of domestic inflation data due this week, adding to investor unease. In the initial ten days of May, foreign investors withdrew a substantial Rs. 17,000 crores from Indian equities.

According to data revealed by the National Statistical Office on Friday, the industrial output growth rate in India decelerated to 4.9 percent in March from 5.7 percent in February. Simultaneously, the pivotal phase four polling for the Lok Sabha elections 2024 launched at 7 a.m. today and will proceed till 6 p.m., covering all Lok Sabha and assembly seats.

Asian markets were primarily lower this morning following contradictory Chinese inflation data and rumors of impending tariff hikes on Chinese clean-energy goods by the Biden administration. On the brighter side, Chinese authorities have initiated plans to sell long-dated bonds worth 1 trillion yuan to stimulate domestic expenditure.

The U.S. Dollar gained strength against major rivals, with concentration on forthcoming U.S. inflation data and Federal Reserve Chair Jerome Powell's dialogue. Gold remained stable, while oil slightly depreciated ahead of an OPEC meeting regarding supply policy amidst perplexing signals from Iraq about its position.

U.S. stocks displayed varied performance on Friday, as investors await statements from the Federal officials to gain clarity on the monetary policy roadmap following recently released data suggesting a sluggish U.S. labor market.

According to economic releases, U.S. consumer sentiment in May plunged to a six-month low due to intensifying worries about inflation, unemployment, and interest rates. The one-year inflation anticipation as per the survey increased to 3.5 percent in May from 3.2 percent in April.

On a brighter note, the Dow slightly grew by 0.3 percent on Friday, signifying the eighth continuous day of gains and its longest daily winning streak since December. The S&P 500 grew by 0.2 percent, while the Nasdaq Composite concluded with minor losses.

In comparison, European stocks steadily increased for the sixth consecutive day on Friday after official data indicated the UK's strong rebound from a technical recession in the first quarter of 2024, well ahead of the expected elections later this year. The overall European STOXX 600 escalated by 0.8 percent. Germany's DAX grew by 0.5 percent, France's CAC 40 by 0.4 percent, and the UK's FTSE 100 by 0.6 percent.