(fxcue news) - Indian shares may open on a flat note Thursday, tracking weak cues from U.S. markets amid escalating U.S.-China trade tensions and a deteriorating outlook for global trade. "The outlook for global trade has deteriorated sharply due to a surge in tariffs and trade policy uncertainty," the WTO said in its latest "Global Trade Outlook and Statistics" report. The downside, if any, may remain capped somewhat amid foreign inflows and expectations that both the RBI and the U.S. Federal Reserve will slash interest rates in the coming months. Benchmark indexes Sensex and Nifty eked out modest gains on Wednesday while the rupee gained 12 paise to close at 85.68 against the dollar, extending its winning streak for a third straight session. After their largest single-day net buying on Tuesday, foreign investors continued to be net buyers and bought shares worth Rs 3,936 crores on Wednesday, while domestic investors net sold shares worth Rs 2,513 crore, as per provisional data. Asian markets clung to modest gains this morning following Japan's progress in trade talks with the U.S. The dollar looked set to notch a fourth straight weekly loss while gold slipped on profit taking after surging to a record high of $3,357.40 per ounce, on safe-haven demand amid escalating global trade tensions. WTI crude futures extended gains after rising nearly 2 percent on Wednesday as the U.S. imposed new sanctions on a Chinese "teapot" refinery and other entities for importing Iranian oil. U.S. stocks posted steep losses overnight as Nvidia and ASML warned about the costly impact of tariffs on the semiconductor chip industry and Fed Chair Jerome Powell cautioned that trade tensions may undermine employment and price stability. Powell noted the U.S. economy is still in a solid position despite heightened uncertainty and downside risks, adding the U.S. central bank would wait for more economic data before considering any adjustments to the current policy stance. In economic releases, U.S. retail sales grew by more than anticipated in March, while industrial output declined from a month earlier, separate reports revealed. The tech-heavy Nasdaq Composite plummeted 3.1 percent, the S&P 500 plunged 2.2 percent and the Dow tumbled 1.7 percent. European stocks recovered from early weakness to end mixed on Wednesday. The pan European STOXX 600 slid 0.2 percent amid rising U.S.-China trade tensions and fresh export restrictions on Nvidia chips. The German DAX and the U.K.'s FTSE 100 both rose by 0.3 percent while France's CAC 40 finished marginally lower.