Indian stock markets are expected to open lower on Tuesday as investors are likely to opt for caution before the start of the US Federal Reserve's two-day policy meeting.
Indian markets ended mixed on Monday, with BSE Sensex gaining 0.05 percent and Nifty losing 0.17 percent, weighed down by weakness in health care and IT sectors. Both the benchmark indices surged in the morning session after market regulator Sebi allowed Foreign Investors to invest in government securities without any auction mechanism. However, markets later turned lower as higher-than-expected August inflation data dashed hopes of RBI cutting rates later this week.
Asian markets were mostly declined on Tuesday before the start of Fed’s two-day policy meeting at which the central bank is widely expected to reduce the pace of its monetary stimulus program.
"If the Fed fails to deliver, it will reinforce the criticism about the Fed's communication effectiveness. Yet if the Fed tapers and demonstrates that its communication has indeed been effective as the majority of market participants correctly anticipated the tapering, it risks repeating its previous mistakes when it ended previous QE operations prematurely,” strategists at Brown Brothers Harriman said in a note to clients, Reuters reported.
China's Shanghai Composite fell 0.28 percent and Hong Kong's Hang Seng fell 0.29 percent, while South Korea's KOSPI slipped 0.65 percent and Japan's benchmark Nikkei 225 rose 0.16 percent.
US stock markets mostly ended on positive note on Monday, on news that hawkish American economist Larry Summers has withdrawn from the race to head the US Federal Reserve. The Dow Jones Industrial Average gained 0.77 percent, the S&P 500 Index was up 0.57 percent and the Nasdaq Composite Index fell 0.12 percent.
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