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Indian shares look set to open lower on Wednesday as investors react to weak global cues and domestic inflation and trade deficit data. <\/p>\n
Data from the National Statistical Office revealed on Monday that India’s consumer price inflation rose more-than-expected in July to the highest level in more than a year amid high food prices, especially vegetables.<\/p>\n
The consumer price index climbed 7.44 percent year-over-year in July, faster than the revised 4.31 percent rise in June. Economists had forecast the inflation rate to increase to 6.4 percent.<\/p>\n
Moreover, inflation surpassed the Reserve Bank of India’s tolerance band of 2-6 percent for the first time in five months and was above the medium-term target of 4.0 percent.<\/p>\n
Separate data showed that India’s wholesale prices declined for the fourth successive month in July, though at a slower-than-expected pace.<\/p>\n
The wholesale price index dropped 1.36 percent year-over-year in July, slower than the 4.12 percent decrease in June. Economists had expected a 2.7 percent fall.<\/p>\n
India’s merchandise trade deficit slightly widened to $20.67 billion in July, as compared to $20.13 billion in June. The trade deficit data, however, narrowed in the month on a year basis.<\/p>\n
Financial markets<\/span> were closed on Tuesday on account of Independence Day.<\/p>\n On Monday, benchmark indexes Sensex and Nifty recovered from an early slide to end marginally higher, while the rupee hit a 10-month low before closing down 10 paise at 82.95 against the dollar.<\/p>\n Asian markets followed Wall Street lower this morning on worries about the Chinese economy<\/span> and fears that the Federal Reserve may keep interest rates higher for longer.<\/p>\n Copper prices hit a two-month low and oil extended overnight losses on China demand concerns, while gold traded slightly above $1,900 per ounce against the backdrop of risk aversion. <\/p>\n U.S. stocks hit a five-week low overnight while longer-term Treasury yields hit their highest levels this year after data showed retail sales rose more than expected in July, denting dovish Fed bets. <\/p>\n The sell-off was compounded by weak economic data from China and a warning from Fitch that U.S. banks, including JPMorgan Chase, could be downgraded.<\/p>\n The Dow dropped 1 percent, the S&P 500 declined 1.2 percent and the tech-heavy Nasdaq Composite fell 1.1 percent. <\/p>\n European stocks closed notably lower Tuesday on concerns about the Chinese property sector and an uncertain outlook for interest rates. <\/p>\n The pan European STOXX 600 shed 0.9 percent. The German DAX gave up 0.9 percent, France’s CAC 40 lost 1.1 percent and the U.K.’s FTSE 100 slumped 1.6 percent. <\/p>\n<\/p>\n Market Analysis<\/p>\n<\/div>\n