Sensex, Nifty Set To Extend Losses As Oil Hits 13-week High

Indian shares look set to extend recent losses on Thursday amid renewed worries about inflation and the outlook for interest rates.

Brent crude oil prices rose above $123 a barrel to hit a 13-week high and U.S. Treasury yields rose above the psychologically important 3 percent level, adding to the pressure on RBI to keep raising rates gradually.

Benchmark indexes Sensex and the Nifty ended slightly lower on Wednesday to extend losses for a fourth straight session after the RBI raised the repo rate by a bigger-than-expected 50 basis points.

Asian markets fell broadly this morning as investors awaited cues from today’s ECB meeting and Friday’s U.S. CPI release. China’s CPI and producer price index (PPI) data are also due on Friday.

The Japanese yen extended its slide and gold inched lower, while oil extended overnight gains, underpinned by signs of robust demand in the world’s top consumer United States.

U.S. stocks fell overnight, with concerns about slowing growth and prospects of tighter policy measures by the Fed weighing on markets.

As interest rates climb, a measure of U.S. mortgage applications fell to its lowest level in 22 years last week, data showed.

The Dow dropped 0.8 percent, the S&P 500 fell 1.1 percent and the tech-heavy Nasdaq Composite declined 0.7 percent.

European stocks also closed lower on Wednesday following a profit warning from Credit Suisse and downward revisions in global growth forecasts by the World Bank and the OECD.

The pan European Stoxx 600 gave up 0.6 percent. The German DAX and France’s CAC 40 index both declined around 0.8 percent, while the U.K.’s FTSE ended little changed with a negative bias.

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