Sensex, Nifty Set To Extend Losses On Rate, Middle East Worries

Indian shares look set to open lower on Tuesday amid escalating tensions in the Middle East and uncertainty over the Federal Reserve's rate trajectory.

Media reports suggest that Israel has reviewed military plans for a potential response against Iran. The war cabinet reportedly remains determined to act, but it is not clear if a decision has been made.

While U.S. and European officials called for restraint, Israeli Defense Minister Yoav Gallant said the country has no choice but to respond to Iran's weekend attack.

Benchmark indexes Sensex and Nifty tumbled around 1.1 percent each on Monday while the rupee ended at a record closing low of 83.45 against the dollar.

Asian markets were broadly lower this morning as data showed Chinese retail sales and industrial production slowed in March. GDP grew 5.3 percent in the first quarter, beating expectations.

Treasuries held steady in Asian trading and gold prices were marginally higher while the dollar stood just off its highest since early November against a handful of peer currencies.

Brent crude futures climbed toward $91 a barrel after a modest drop on Monday. West Texas Intermediate crude futures held above $86 a barrel.

U.S. stocks fell sharply overnight to extend last week's sell-off while the 10-year yield jumped above 4.6 percent for the first time since November, as robust gains in March retail sales figures combined with upward revisions in the prior two months added to concerns about the outlook for interest rates.

The tech-heavy Nasdaq Composite and the S&P 500 plunged 1.8 percent and 1.2 percent, respectively to reach their lowest closing levels in almost two months, while the Dow shed 0.7 percent to hit a nearly three-month closing low.

European stocks ended mixed on Monday as escalating Middle East tensions offset a batch of encouraging regional economic data.

The pan European STOXX 600 inched up 0.1 percent. The German DAX rose half a percent and France's CAC 40 edged up 0.4 percent while the U.K.'s FTSE 100 dipped 0.4 percent.

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