Global Cues Point to Positive Start for Indian Markets Despite Mixed Asian Trade Ahead of Fed Decision

Mumbai, June 17: Indian benchmark indices are likely to open on a positive note on Wednesday, supported by lower crude oil prices and resilient global risk sentiment, even as Asian markets traded mixed ahead of the U.S. Federal Reserve’s monetary policy decision later in the day. 

Asian Markets Mixed Ahead of Fed 

Asian equities lacked a clear direction as investors remained cautious before the Federal Reserve’s policy announcement and updated economic projections. Japan’s Nikkei 225 gained 0.75%, tracking Wall Street’s resilience and benefiting from a weaker yen, while South Korea’s Kospi rose 0.18%. 

However, broader regional sentiment remained subdued. The MSCI Asia Pacific ex-Japan index slipped 0.4%, while Hong Kong’s Hang Seng declined 0.7% as investors booked profits following recent gains and awaited greater clarity on the global interest-rate outlook. 

Market participants also continued to assess the impact of easing geopolitical tensions in the Middle East after progress in U.S.-Iran negotiations helped calm concerns over oil supply disruptions. Crude prices extended their recent decline, providing support to risk assets and improving the outlook for major oil-importing economies such as India. 

Wall Street Ends Mixed as Focus Shifts to Fed 

U.S. markets closed mixed overnight, with investors largely refraining from making significant bets ahead of the Fed’s policy decision. The Dow Jones Industrial Average ended at a record high, supported by lower energy prices and strength in economically sensitive sectors, while the S&P 500 and Nasdaq finished lower. 

Investors are widely expecting the central bank to leave interest rates unchanged. However, markets will closely watch the Fed’s updated economic projections and Chair’s comments for clues on the timing of potential rate cuts later this year. 

European Stocks Extend Gains 

European shares edged higher on Tuesday, with the pan-European STOXX 600 index hovering near record highs as investors welcomed signs of increased oil supplies and easing geopolitical risks. Banks and industrial stocks led gains across the region, while lower energy costs improved sentiment toward growth-sensitive sectors. 

The benchmark index has largely recovered losses triggered by the Middle East conflict, reflecting improving confidence in the global economic outlook. 

Implications for Dalal Street 

For Indian markets, falling crude oil prices remain the biggest positive trigger. Softer oil prices ease concerns around imported inflation, fiscal balances and corporate input costs, creating a favourable backdrop for equities. 

While mixed Asian markets may temper enthusiasm at the open, strong performances in Europe and Wall Street, coupled with easing oil prices, suggest Indian equities could begin the session with a positive bias. Investors will nevertheless remain cautious ahead of the Federal Reserve’s policy outcome, which is expected to set the tone for global markets over the remainder of the week. 

Source

• Exchanges