Indian Shares Set To Join Global Selloff Amid Inflation And Middle East Concerns

(RTTNews) - Indian shares are seen opening sharply lower on Monday as investors weigh weak global cues and escalating Midde East tension against strong domestic GDP data as well as the Indian government's decision eliminating the 12.5 percent long term capital gains tax on foreign institutional investment in government bonds.

The Indian economy logged robust growth in the March quarter despite geopolitical tensions, official data showed Friday.

GDP grew 7.8 percent on a yearly basis in the January to March quarter, outpacing economists' forecast of 7.2 percent on strong domestic demand and government expenditure.

Meanwhile, with an aim to attract foreign capital, the government on Friday announced that it would exempt capital gains tax on investments made by foreign institutional investors in government securities.

Global bond yields surged and the U.S. dollar jumped to a two-month high amid signs the U.S. Federal Reserve may not cut borrowing costs anytime soon and that it might instead raise rates later this year against a backdrop of high inflation.

Crude prices surged over $3 a barrel this morning after Israel struck Hezbollah targets in Beirut's southern suburbs over the weekend and Iran retaliated by launching a volley of missile strikes against Irael.

U.S. President Donald Trump has asked Irael not to retaliate, saying it would jeopardize the ongoing negotiations for a peace deal to end the three-month long conflict.

Asian markets were deep in the red, with technology stocks bearing the brunt of the selling.