Indian Shares Set To Rebound As Greenland Tensions Ease

Indian shares are seen opening higher on Thursday as Greenland-related geopolitical and trade tensions eased and risk appetite returned to equity global markets.

Long-dated Japanese debt rebounded from its losses, helping ease concerns over bond selloff.

That said, uncertainty over India-U.S. trade deal and continued outflows from foreign investors from domestic shares may lead to volatility as the session progresses.

Benchmark indexes Sensex and Nifty ended down around 0.3 percent each to extend a selloff into a third straight session on Wednesday, ending off their day’s lows after reports emerged that India and the European Union are close to finalizing a long-awaited Free Trade Agreement.

The rupee tumbled 72 paise to close at a record low of 91.70 against the dollar.

Foreign investors net sold shares worth Rs 1,788 crore on Wednesday, while domestic institutional investors net bought shares to the extent of Rs. 4,520 crore, according to provisional exchange data.

Asian markets traded higher this morning while Treasuries were steady after a $13 billion auction of 20-year bonds in the U.S. drew strong demand.

The dollar index and oil prices were little changed while gold was down 0.8 percent at $4,793 an ounce after surging to a new high in the previous session.

U.S. stocks ended sharply higher overnight after President Trump called off proposed tariffs tied to Greenland, saying a framework has been formed with Nato for a future deal with respect to Greenland and, in fact, the entire Arctic Region.

He did not provide details but said additional discussions are ongoing. Trump told CNBC shortly after that announcement that “we have a concept of a deal” with Greenland.

The Dow, the S&P 500 and the tech-heavy Nasdaq Composite all rallied around 1.2 percent.

European stocks ended little changed on Wednesday as the European Union’s legislative body halted work on the final approval and implementation of the EU-U.S. trade deal until further notice and U.S. President Trump insisted in his speech at the World Economic Forum in Davos, Switzerland, that he would not use force to acquire Greenland.

The pan European Stoxx 600 ended flat with a negative bias. The German DAX dipped 0.6 percent, while France’s CAC 40 finished marginally higher and the U.K.’s FTSE 100 added 0.1 percent.