MUMBAI : Indian markets may remain subdued today ahead of the Federal Open Market Committee (FOMC) scheduled for the next two days. Investors' caution ahead of the US Federal Reserve’s interest rate meeting capped Asian stocks today, while crude oil prices retreated as global growth worries overshadowed supply concerns stemming from recent Middle East tensions.

MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.05%. Australian stocks added 0.1% while Japan’s Nikkei dipped 0.05%.

The Fed, facing fresh demands by US President Donald Trump to cut interest rates, begins a two-day meeting later today. The central bank is expected to leave borrowing costs unchanged this time but possibly lay the groundwork for a rate cut later this year. Fresh hopes for a looser US monetary policy have been a tonic for risk assets markets, which were buffeted last month by an escalation in the trade conflict between Washington and Beijing. The S&P 500 has gained 5% this month after sliding in May on trade war fears.

Focus is now on how close the Fed could be to cutting interest rates amid the raging US-China trade war, signs of the economy losing steam and pressure by Trump to ease policy.

Foreign institutional investors have been net buyers of Indian equities, pumping in $11.24 billion so far this year. Higher interest rates tempt large foreign funds to move their money to the US, hurting emerging markets including India. Inflow of foreign liquidity is critical to Indian markets, which have seen a steady sell-off by domestic investors. Domestic institutional investors have bought shares worth 12,721 crore in 2019 so far.

Shares of aviation companies are likely to be in focus today. Lenders to Jet Airways (India) Ltd on Monday decided to start bankruptcy proceedings against the grounded airline, ending hopes of a recovery. The consortium of lenders, led by the State Bank of India (SBI), chose to refer Jet Airways to the National Company Law Tribunal (NCLT), the state-run bank said in a statement.

Meanwhile, Indigo, India’s largest domestic airline by market share, on Monday said it is ordering jet engines worth $20 billion from CFM International, a joint venture of General Electric Co. and France’s Safran SA, to power 280 Airbus A320neo and A321neo aircraft operated by it.

US Treasury yields dipped on Monday after the New York Fed’s “Empire" gauge of business growth in the state showed a fall this month to its weakest in more than 2-2.5-years, fanning rate cut expectations.

The dollar index against a basket of six major currencies stood little changed at 97.507 after pulling back from a two-week high on the decline in Treasury yields. The pound traded at $1.2542 after retreating overnight to a six-month low of $1.2532 on Monday on concerns that arch-Brexiteer Boris Johnson will replace Theresa May as prime minister. The euro was a shade higher at $1.1224 after spending the previous day confined to a narrow range.

US crude oil futures shed 0.08% to $51.89 per barrel after retreating 1.1% the previous day. Oil prices had slipped on Monday as weak Chinese economic data released at the end of last week led to fears of lower global demand for the commodity.

Concerns over weakening demand overshadowed tensions in the Middle East, which remained high following last week’s attacks on two oil tankers in the Gulf of Oman.

(Reuters contributed to the story)