India’s equity benchmark indexes are likely to open little changed on Monday, as global investor sentiment was dented after Moody’s downgraded U.S. government’s credit rating on Friday.
The Gift Nifty futures were trading at 25,066.5 as of 8:10 a.m. IST, indicating that the Nifty 50 will open around its previous close of 25,019.8.
Most Asian markets were lower on the day, with MSCI Asia ex Japan down 0.7%, while U.S. equity futures and the dollar also slipped.
U.S. Treasury yields rose on Friday after rating agency Moody’s downgraded the U.S. government to AA1 from AAA, citing rising debt and interest “that are significantly higher than similarly rated sovereigns”.
Higher Treasury yields make bonds attractive for foreign portfolio investors, which does not bode well for equities in emerging markets such as India.
Indian shares log weekly gains on ceasefire with Pakistan, US deal hopes
Investors will closely watch if the rising yields trigger any change in the course of foreign flows. Foreign portfolio investors bought Indian shares worth 159.25 billion rupees ($1.9 billion) last week, when the Nifty 50 gained 4.2%.
This was the fifth consecutive weekly buying from these investors.
Traders are waiting for news on India-U.S. trade talks after U.S. President Donald Trump said last week that India has offered a trade deal with zero tariffs.
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