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

Business Recorder reported that Indian equities were expected to start Wednesday's session on a firmer note, as the main indices looked set for a technical recovery. On Tuesday, the Nifty 50 ended at a five-month low of 23,118.60, while GIFT Nifty futures traded near 23,218.50 early in the day. Both indices are viewed as oversold, which leaves room for a bounce, although LKP Securities analyst Vatsal Bhuva said the overall trend remains bearish.

Analysts see markets staying restrained because of high crude, busy primary issuance and a Federal Reserve policy announcement due later today. Brent crude hovered around $108.3 a barrel, close to a four-month peak reached on Tuesday, as supply worries deepened after Saudi Arabia paused oil loadings at its Yanbu port and cut shipments to Europe. Foreign institutions pulled out a net 29.78 billion rupees ($310.37 million) on Tuesday, their heaviest outflow since September 4, while domestic institutions were net buyers of 26.86 billion rupees.

Investors were largely expecting the Fed to raise rates, and higher US rates make emerging markets like India less attractive to global investors. Growth in Indian IT, which earns a sizeable share of its revenue in the United States, is also being affected. Three IPOs, including Hero Motors, SS Retail and Jindal Supreme India, open for subscription on Wednesday, taking the total of active offerings to four.