Indian Shares Likely To Open On Cautious Note

(RTTNews) - Indian shares are seen opening on a cautious note on Wednesday as investors react to renewed U.S.-Iran tensions and lingering uncertainty surrounding the strategic Strait of Hormuz.

Iran accused the United States of breaching their ceasefire and warned it was ready to retaliate after U.S. forces hit Iranian missile sites and boats.

U.S. Secretary of State Marco Rubio said any potential peace deal could still take several days to complete amid unresolved issues surrounding Tehran's frozen assets and unrestricted passage through Hormuz.

Iran's Islamic Revolutionary Guard Corps (IRGS) said that it targeted an F-35 fighter jet and several drones after identifying "hostile aircraft" entering Iranian airspace.

It is feared that further military escalation could prompt Iran to retaliate against neighboring states.

In a written statement carried by state television, Iran's Supreme Leader Mojtaba Khamenei said regional countries would no longer be shields for U.S. bases.

Closer home, the United States and India have signed a bilateral framework on securing the supply, mining and processing of critical minerals and rare earths.

India's External Affairs Minister Jaishankar said this framework aims to deepen India-U.S. cooperation across the entire critical minerals and rare-earth supply chain, including mining, processing, recycling, and related investments.

Benchmark indexes Sensex and Nifty fell around half a percent each on Tuesday after American forces hit missile launch sites in Iran and boats trying to place mines, denting hopes of an imminent peace deal.

The rupee depreciated 47 paise to close at 95.73 against the U.S. dollar. The RBI's three-year dollar/rupee FX swap auction drew strong demand on Tuesday, receiving bids of nearly $10 billion, almost twice the size of the auction.

FIIs net sold shares worth Rs. 2,408 crore on Tuesday, while domestic financial institutions net bought shares to the extent of Rs. 1,361 crore, according to provisional exchange data.

Asian markets were broadly higher this morning, fueled by a surge in technology shares. The dollar weakened and gold was little changed above $4,500 an ounce, while Brent crude futures hovered near $99 a barrel after recent losses.

U.S. stocks ended mostly higher overnight as bond yields eased following comments by President Trump that negotiations with Iran "are proceeding nicely."

Investors shrugged off new data that showed U.S. consumer confidence eased in May due to increased worries about inflation linked to the Iran war.

The tech-heavy Nasdaq Composite and the S&P 500 surged 1.2 percent and 0.6 percent, respectively to reach new record closing highs, propelled by a rally in chip and memory stocks. The narrower Dow eased 0.2 percent.

European stocks closed firmly lower on Tuesday after the U.S. military launched new strikes on Iran and ECB Executive Board member Isabel Schnabel said the central bank should raise interest rates in June even there's a quick resolution to the Middle East conflict.

The pan-European STOXX 600 declined 0.6 percent. The German DAX dipped 0.8 percent and France's CAC 40 gave up 1 percent while the U.K.'s FTSE 100 edged up by 0.2 percent as traders returned from a long holiday weekend.