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Sensex, Nifty To Open Gap-down Amid Global Rout; Oil Companies May Rally

Indian shares look set to open sharply lower on Thursday after a rout in U.S., European and Asian equities as investors fret about global economic growth outlook.

That said, a sharp fall in oil and other commodity prices overnight might help ease investor concerns surrounding inflation and the twin deficits.

Crude oil futures for November delivery fell 1.4 percent in Asian trade, adding to a 2.4 percent slide overnight as escalating tensions between the U.S. and China raised concerns that global oil demand will decline in the near term.

Brent crude was down 1.5 percent at $81.85 a barrel after closing 2.2 percent lower on Wednesday amid easing supply worries as Hurricane Michael likely spared oil assets from significant damage.

The earnings season will also be in focus as software giant TCS announces its September quarter earnings today.

Benchmark indexes Sensex and the Nifty jumped 1.4 percent and 1.5 percent, respectively on Wednesday as the news about SBI buying NBFC assets brought cheer to the banking sector hit by the IL&FS debacle. The rupee ended up by 18 paise at 74.21 per dollar, snapping its six-session losing streak.

Benchmark indexes in Australia, China, Hong Kong, Japan and South Korea are down between 2-4 percent.

U.S. stocks tumbled the most in eight months on Wednesday and safe-haven assets such as Treasuries and the yen rose as investors fretted about the impact of the U.S.-China trade war and rising interest rates.

The S&P 500 lost 3.3 percent and the Dow retreated 3.2 percent to log their biggest single-day losses since Feb. 8, while the tech-heavy Nasdaq slumped 4.1 percent to post its steepest loss since June 24, 2016.

European markets also ended Wednesday's session sharply lower as investors kept a close eye on developments around Brexit and Italy's budget.

The pan-European Stoxx Europe 600 index dropped 1.6 percent. The German DAX gave up 2.2 percent, France's CAC 40 index declined 2.1 percent and the U.K.'s FTSE 100 shed 1.3 percent.

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