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Indian Shares Set To Open On Cautious Note

Indian shares may drift lower on Tuesday as investors react to rising Covid-19 cases in the country and climbing oil prices amid the slow return of U.S. crude output that was cut by frigid conditions.

Meanwhile, with inflation under control, India's growth momentum needs to be strengthened for a sustained revival of the economy and quick return to the pre-Covid trajectory, according to minutes of the last monetary policy meeting.

Benchmark indexes Sensex and the Nifty fell over 2 percent on Monday while the rupee gained 16 paise to settle at 72.49 against the U.S. dollar supported by sustained foreign fund inflows.

Asian markets are trading mixed this morning, with Japanese markets closed for a public holiday. The dollar nursed losses ahead of Fed Chair Jerome Powell's bi-annual testimony while gold steadied after two days of gains. Oil prices rose further in Asian trade after climbing nearly 4 percent overnight.

Bitcoin prices stabilized after plunging as much as 19 percent in a violent sell-off Monday, the biggest of the year in dollar terms.

U.S. stocks fell broadly overnight as rising commodity prices and climbing government bond yields stoked worries about inflation and valuations, just as the world starts to bounce back from the coronavirus pandemic.

Traders also looked ahead to two days of Congressional testimony by Federal Reserve Chair Jerome Powell.

The Dow Jones recovered from an early slide to end 0.1 percent higher, while the S&P 500 shed 0.8 percent and the tech-heavy Nasdaq Composite tumbled as much as 2.5 percent.

European markets closed slightly lower on Monday as the reflation trade emerged as a key theme.

The pan European Stoxx 600 shed 0.4 percent. The German DAX dropped 0.3 percent, the U.K.'s FTSE 100 slid 0.2 percent and France's CAC 40 index dipped 0.1 percent.

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