Sensex, Nifty May Extend Losses On Election Uncertainty

(RTTNews) - Indian shares are seen opening lower on Wednesday after voters delivered a split election in the Lok Sabha election, with Nitish Kumar's JD(U) from Bihar and N. Chandrababu Naidu's Telugu Desam Party from Andhra Pradesh holding the key to government formation.

The surprising election outcome prompted foreign institutional investors (FIIs) to offload shares worth Rs 12,436.22 crore on Tuesday while domestic institutional investors (DIIs) sold shares worth Rs 3,318.98 crore, stock exchange data revealed.

Global cues remain mixed even as weakness in the U.S. labor market helped increase bets the Federal Reserve to lower interest rates in the coming months.

Benchmark indexes Sensex and Nifty plummeted around 6 percent each on Tuesday amid concerns that a smaller majority will see Prime Minister Modi face more difficulty in doling out reforms and infrastructure spending.

Domestic bond yields spiked, and the rupee slumped 45 paise to close at 83.59 against the dollar.

Asian markets traded mixed this morning, Treasury yields were little changed, and gold was marginally higher while oil hovered near four-month lows after industry data pointed to an increase in U.S. crude stockpiles.

U.S. stocks eked out modest gains overnight as Treasury yields extended their pullback seen over the past few sessions on data showing that U.S. job openings fell more than expected in April.

The Dow rose 0.4 percent while the tech-heavy Nasdaq Composite and the S&P 500 both inched up around 0.2 percent.

European stocks fell for the first time in three days on Tuesday as investors looked ahead to the ECB meeting and the release of more U.S. economic data.

The pan European STOXX 600 dipped half a percent. The German DAX lost 1.1 percent, France's CAC 40 shed 0.8 percent and the U.K.'s FTSE 100 eased 0.4 percent.