Indian shares look set to open higher on Wednesday after oil prices slumped 8 percent to drift below $100 a barrel for the first time since May on fears that a recession will hit global demand for fuel.
Underlying sentiment, however, may remain cautious on concerns over growth and aggressive monetary policy tightening by the Federal Reserve.
Ratings agency Nomura said in a report that record high trade deficits will be the norm now and the rupee will likely to fall to 82 against the dollar in the third quarter of 2022.
Benchmark indexes Sensex and the Nifty gave up early gains to end modestly lower on Tuesday and the rupee slipped 41 paise to close at 79.36 against the dollar on the back of capital outflows and worries over the twin deficits.
Asian markets were mostly lower this morning as fears of an economic downturn deepened.
Demand for havens bolstered Treasuries and the euro slumped towards parity with the dollar while the British pound held losses sparked by turmoil in British politics. Oil prices rose about 1 percent after a heavy rout in the previous session.
U.S. stocks ended mixed overnight as concerns about the state of the economy offset signs of an easing in U.S.-China tensions.
The Dow slipped 0.4 percent while thee S&P 500 edged up 0.2 percent and the tech-heavy Nasdaq Composite gained 1.8 percent.
European stocks nosedived on Tuesday as weak business activity data, record high gas prices and signs of repeated mass testing in China reignited worries of a recession.
The pan European Stoxx 600 lost 2.1 percent. The German DAX and he U.K.'s FTSE 100 both plunged around 2.9 percent, while France's CAC 40 index gave up 2.7 percent.