Sensex Seen Flat-to-higher

(RTTNews) - The Indian markets are likely to open flat to slightly higher on Monday, tracking firm Asian cues. Shares of ITC could be in focus after the country's largest cigarette maker posted a weak set of numbers for the March quarter due to a fall in volumes amid a government push to discourage tobacco consumption.

The benchmark indexes Sensex and Nifty climbed more than 2 percent each to hit five-week closing highs last week as easing headline inflation, falling oil prices and news that the government has bettered its targets for fiscal deficit and revenue deficit for the year ended March fueled hopes that another rate cut is on the cards on June 2.

As Narendra Modi government celebrates one year in office, industry body CII said the one year of Modi-led government has been "action-packed" and economic strategies and deliverables "have gained huge momentum, but there has been no big-bang investments and issues on ease of doing business still need to be addressed.

Separately, Assocham said that it expects further reform initiatives in the next two quarters along with more attention to the rural economy.

Asian shares are mostly higher in thin holiday trading amid holidays in Hong Kong and South Korea. Japan's Nikkei index is moving up 0.7 percent, rising for a seventh straight day, as the yen weakened to a two-month low versus the dollar in response to the Fed Chair's latest comments about interest rates.

Meanwhile, trade data released before market open showed that Japan's trade deficit narrowed sharply in April from the previous year, as exports climbed more than expected and a decline in oil prices contributed to the fall in imports.

Australia's All Ordinaries index is up over 1 percent, China's Shanghai Composite index is rallying 1.7 percent and New Zealand's NZX-50 index is gaining 0.4 percent. Crude oil futures were steady in early Asian deals after falling sharply on Friday amid persisting concerns over global supply glut.

U.S. stocks ended a choppy session mostly lower on Friday after Federal Reserve Chairwoman Janel Yellen hinted that it would be appropriate to raise interest rates at some point this year, as long as economic activity picks up. Also, rising shelter and medical care costs boosted underlying inflation pressures, the Labor Department reported, sending the dollar higher and pushing government bond yields up. The Dow slid 0.3 percent, the S&P 500 eased 0.2 percent and the tech-heavy Nasdaq slipped marginally.

The European markets turned in a mixed performance on Friday after reports emerged that Germany and the IMF are becoming increasingly hardline in their approach to Greece in the ongoing bailout talks. European Central Bank (ECB) President Mario Draghi said that the outlook for the euro zone looked brighter than it has been for the last seven years, sparking a rebound in the euro. The German DAX fell 0.4 percent and France's CAC 40 edged down 0.1 percent, while the FTSE 100 of the U.K. advanced 0.3 percent.