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Sensex, Nifty Seen Higher At Open; RBI Meeting Eyed

Indian shares look set to open a tad higher on Wednesday as investors digest core sector output data as well as the government's decision to cut the basic excise duty on diesel and petrol to counter inflation.

Ahead of the RBI's monetary policy review due out later in the day, official data showed that the output of India's core sector, comprising eight infrastructure segments, grew 4.9 percent in August compared with 2.6 percent in July.

Meanwhile, the Modi government slashed the excise duty on petrol and diesel by Rs 2 per liter, effective from October 4, as part of efforts to cushion the impact of rising international prices.

Investors await the Reserve Bank of India's policy meeting, although many expect the central bank to maintain status quo on lending rates, citing risks to inflation.

Benchmark indexes Sensex and the Nifty jumped around 0.7 percent each on Tuesday as top automakers reported strong monthly sales figures for September and survey figures from IHS Markit showed India's manufacturing activity logged a sustained expansion in September, underpinned by increases in both output and new orders. The rupee, however, fell sharply to close at 65.50 per dollar versus Friday's close of 65.28.

Asian stocks are mostly higher this morning after U.S. stocks hit fresh record highs overnight on optimism about the economic outlook and the prospects for Republican tax reform. The dollar pulled back and oil extended losses on data showing a rise in U.S. gasoline stockpiles and crude inventories while gold hovered near seven-week lows.

Overnight, the Dow Jones Industrial Average rose 0.4 percent to extend its winning streak for a fifth straight session, while the S&P 500 and the Nasdaq Composite edged up around 0.2 percent each.

European markets eked out modest gains on Tuesday as Catalonia worries eased and the Bank of England said that Brexit poses risks to the ability of British companies to borrow from European banks. The pan-European Stoxx Europe 600 index rose 0.2 percent.

by RTT Staff Writer

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