Indian shares may edge lower on Wednesday, tracking weak global cues after the latest Federal Reserve statement damped expectations for more monetary stimulus and data showed activity in Australia's service sector contracted for a second month in March. Asian markets are trading mostly lower, commodities retreated and the euro is trading near one-week low versus the dollar.
Profit taking after three sessions of gains could also weigh on markets to some extent, as Indian stock markets and money markets will remain shut on Thursday and Friday for public holidays.
Indian shares rose for the third straight day on Tuesday, with banks pacing the gainers as investors continued to pin hopes on interest rate cuts during the monetary policy meeting slated for this month.
Positive global cues following better-than-expected US manufacturing and China's non-manufacturing PMI data also helped ease concerns about economic outlook. The BSE Sensex ended up 120 points or 0.68 percent at 17,597, while the broader Nifty index rose by 41 points or 0.76 percent to 5,359.
Provisional data released by BSE shows that foreign institutional investors continued to remain net buyers in Indian equities and bought shares worth Rs.332.47 crore yesterday, while domestic financial institutions bought shares to the extent of Rs.200.28 crore.
On Wall Street, stocks lost ground on Tuesday, with selling accelerating in the afternoon session after the Federal Reserve released the minutes of its latest monetary policy meeting. The Dow ended down half a percent, the tech-heavy Nasdaq slipped 0.2 percent and the S&P 500 slid 0.4 percent.
The minutes of the Fed's March meeting indicated that the members were less willing to initiate another round of quantitative easing amid signs of improvement in the U.S. economy. The latest minutes said only "a couple of members" indicated that additional stimulus could become necessary, compared to the minutes of the January meeting, which said "a few members" believed that conditions could warrant additional securities purchases.
Earlier in the day, the Commerce Department released a report showing that factory orders rebounded by slightly less than expected in the month of February. Traders also digested the release of monthly sales results from the nation's major auto manufacturers, with sales rising due in part to increased demand for smaller cars amid the recent surge in gas prices.
by RTT Staff Writer
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