MUMBAI, Sept 4 (Reuters) - The Indian rupee is expected to hold near lifetime lows on Wednesday amid a selloff in risk assets on concerns over the U.S. growth outlook.

The 1-month non-deliverable forward indicated the rupee will open at 83.96-83.97 to the U.S. dollar compared with 83.9675 in the previous session. The local currency's all-time low is 83.9725, hit in the first week of last month.

Japan led Asian equity gauges lower with a more than 3% decline following the selloff on Wall Street. The S&P 500 Index had its worst day in a month and futures indicated a further decline.

Data that indicated U.S. manufacturing activity remained weak and a plunge in shares of Nvidia soured risk appetite.

In wake of the risk off, the rupee will take support from the "always present" Reserve Bank of India, the slump in oil prices and the decline in U.S. Treasury yields, a currency trader at a bank said.

"And, it's not like the equity selloff is having an impact on Asian currencies," he said. The rupee "should spend the day" in a 83.94-83.97 range.

ODDS OF 50 BPS FED CUT RISE

On the back of the equity drawdown and the disappointing U.S. manufacturing data, investors took on bets that the Federal Reserve will cut rates by 50 basis points at this month's meeting.

Investors are pricing in a 42% probability of a 50-basis-point rate cut at the Sept. 17-18 meeting, up from 30%, per CME FedWatch Tool. U.S. Treasury yields dropped amid the growth worries.

The U.S. manufacturing data is still indicating a contracting sector with the key new orders and production components remaining "in the doldrums", ING Bank said in a note.

Meanwhile, oil prices dropped in Asia to add to Tuesday's plunge on concerns over demand. Brent crude is now down 15% this quarter, a welcome relief for the rupee and other Asian oil importers.

KEY INDICATORS:

** One-month non-deliverable rupee forward at 84.04; onshore one-month forward premium at 8 paise

** Dollar index at 101.66

** Brent crude futures down 0.6% at $73.3 per barrel

** Ten-year U.S. note yield at 3.83%

** As per NSDL data, foreign investors bought a net $686.7 mln worth of Indian shares on Sep. 2

** NSDL data shows foreign investors bought a net $4.4 mln worth of Indian bonds on Sep. 2

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https://www.reuters.com/markets/currencies/rupee-remain-mired-near-all-time-low-global-risk-aversion-2024-09-04/