Markets are likely to remain volatile on Wednesday while trends in SGX Nifty suggest a mildly positive opening of Indian benchmark indices. On Tuesday, the BSE Sensex ended at 57,064.87, down 195.71 points or 0.34%. The Nifty closed at 16,983.20, down 70.75 points or 0.41%.

Asian stocks were mixed Wednesday as traders weighed Federal Reserve Chair Jerome Powell’s signal of tighter monetary policy ahead to tackle economic risks from elevated inflation.

Shares rose in Japan and Hong Kong and fluctuated in China. S&P 500 and Nasdaq 100 futures pushed higher, indicating some stabilization after US stocks slumped overnight and measures of equity volatility jumped on the prospect of reduced stimulus.

Jerome Powell said the next US Federal Reserve meeting should discuss whether to wrap up bond purchases a few months earlier and retired the word “transitory" to describe high inflation. That could open the door to earlier interest-rate hikes. Money markets show about 60 basis points of increases priced in by end-2022.

Back home, auto companies are likely to be in focus as they will release November sales data. According to Emkay Global Financial Services, passenger Vehicles’ volumes are likely to be hit by the chip shortages, though volumes should be slightly better. Two-wheelers and tractors are likely to decline due to the moderation in rural demand and high base effect on account of pent-up demand last year. The festive season has been subdued for passenger vehicles, 2-wheelers and tractors.

The Indian economy expanded 8.4% in the September quarter, surpassing its pre-pandemic size, as vaccination picked up pace and services activity returned to normal after the disruptions caused by the devastating second wave of the pandemic in the June quarter.

Future Retail Ltd’s lenders are planning to discuss allegations of financial irregularities against the retailer and may initiate a forensic audit of the company’s books.

The US 10-year Treasury yield climbed but remained below 1.50%. The gap between yields on 5-year and 30-year Treasuries was around the narrowest since March last year after shrinking in the U.S. session. Powell’s pivot came on top of worries about growth threats from the omicron virus strain amid a rift among drugmakers over the efficacy of current vaccines. The dollar ticked up, crude oil pared a tumble and gold held a drop.

Diminishing monetary policy support and the still-uncertain risks for global reopening from the virus variant have sent pulses of volatility across markets. The yield-curve shift could suggest a slowdown for the pandemic recovery.

The perennial issue of raising or suspending the U.S. debt ceiling is also back on the radar. Elevated yields on some Treasury bills maturing in late December are hinting at concern the U.S. will run out of borrowing capacity before the end of this year.