Indices may open higher

Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could rise 58 points at the opening bell.

India's economy will shrink by 3.2% in the current fiscal, the World Bank said on Monday. The COVID-19 pandemic and the multi-phased lockdown imposed to curb its spread has resulted in a devastating blow to the Indian economy. However, the Indian economy is expected to bounce back in 2021, the World Bank said.

The global economy, which has plunged into a severe contraction, will shrink by 5.2% this year due to the massive shock of the coronavirus pandemic and the shutdown measures to contain it, the World Bank said on Monday. The speed and depth with which it has struck, suggests the possibility of a sluggish recovery that may require policymakers to consider additional interventions, it said.

Overseas, Asian stocks were trading higher on Tuesday as confidence in an economic recovery pushed the Nasdaq benchmark to a record high.

In US, the Nasdaq posted a record closing high on Monday, while the Dow and S&P 500 ended higher as lockdown measures eased in New York City and elsewhere, sparking optimism about the potential for economy recovery.

The Dow Jones Industrial Average climbed 461.46 points, or 1.7%, to end at 27,572.44, its sixth straight gain. The S&P 500 rose 38.46 points, or 1.2%, finishing at 3,232.39. The tech-heavy Nasdaq Composite Index gained 110.66 points, or 1.1%, ending at 9,924.74, a new all-time closing record.

Investors were heartened by efforts to reopen the U.S. economy in the aftermath of pandemic-related closures. Reopening plans are in various stages in all 50 U.S. states. New York City, one of the regions hardest hit by coronavirus, launched the first phase of its reopening on Monday, including the restart of construction and limited retail operations.

Investors also will keep an eye on what the central bank does next, with the Fed set to release its updated policy statement on Wednesday and its first set of economic projections since December.

Back home, the Sensex and the Nifty ended with small gains after a volatile session on Monday. Profit selling emerged at higher levels after recent run up in share prices. The barometer S&P BSE Sensex rose 83.34 points or 0.24% at 34,370.58. The Nifty 50 index added 25.30 points or 0.25% at 10,167.45.

Foreign portfolio investors (FPIs) bought shares worth Rs 813.27 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 1,238.23 crore in the Indian equity market on 8 June, provisional data showed.

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