Indian shares are set to drift lower on Thursday, mirroring sharp losses elsewhere across Asia as Fed Chairman explicitly signaled that the central bank seeks to reduce its monthly bond purchases later this year before ending them around mid-2014.
Adding to stimulus worries, preliminary data out of China released today showed that activity in China's vast manufacturing sector weakened further to a 9-month low in June. The HSBC flash manufacturing PMI dropped to 48.3 from 49.2 in the previous month, weighed down by deteriorating external demand, moderating domestic demand and rising destocking pressures.
The benchmark indexes in Australia, China, Hong Kong, Indonesia, Japan, New Zealand, Singapore, South Korea and Taiwan are down 1-2 percent.
Indian shares rose on Wednesday amid optimism the U.S. Federal Reserve would reaffirm its commitment to keep interest rates lower to boost the world's largest economy. The BSE Sensex and the Nifty closed up about 0.1 percent each, reversing earlier losses.
According to provisional data, foreign institutional investors offloaded shares worth Rs.544.97 crore on a net basis yesterday, while domestic financial institutions bought shares to the extent of Rs. 415.82 crore.
In corporate news, the EU anti-trust commission imposed fines totaling 146 million euros on nine global pharma companies, including Ranbaxy Laboratories, for delaying market entry of a cheaper anti-depressant.
Telecom major Bharti Airtel has unveiled plans to invest $125 million in Gabon to develop the 3G and 4G network in the central African country.
Ramco Systems has signed a pact with the Franco-German-Spanish Eurocopter Group to provide cost-efficient fleet management services for helicopter operators.
U.S. And European Markets
U.S. stocks dropped overnight after Bernanke indicated the central bank could begin scaling back its massive asset purchase program later this year, with the goal of ending it entirely in mid-2014 if economic conditions warrant. Acknowledging further improvement in labor market conditions, the Fed said that downside risks to the outlook for the economy have diminished since the fall. The Dow and S&P 500 fell about 1.4 percent each, while the tech-heavy Nasdaq slid 1.1 percent.
European stocks ended Wednesday's session with losses as investors refrained from taking risk ahead of Bernanke's speech. Banks bore the brunt of the selling after a British Parliamentary commission on banking standards called for criminal sanctions against "reckless" bankers. The benchmark indexes in Germany, France and the U.K. fell between 0.4 percent and 0.6 percent.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.