Indian shares look set to open higher on Thursday, as signs of slowing U.S. inflation bolstered hopes that the Federal Reserve would end its interest rate hikes soon.
Investors remain hopeful that there’s no reason for the Fed to raise rates again after this month’s expected hike.
Overall gains, however, may remain capped after TCS and HCL Technologies delivered muted June quarter earnings and macroeconomic data painted a mixed picture of the domestic economy.
India’s consumer price inflation rose more-than-expected in June from the previous month’s 25-month low, while industrial production expanded at an accelerated pace in May, separate data from the National Statistical Office revealed.
Retail inflation climbed to a three-month high of 4.81 percent year-over-year in June, faster than the revised 4.31 percent rise in May. Annual industrial production growth improved to 5.2 percent in May from 4.5 percent in April.
Benchmark indexes Sensex and Nifty fluctuated before ending down around 0.3 percent each on Wednesday ahead of key earnings and macroeconomic data releases.
Asian markets traded higher this morning on optimism about inflation and China ending its crackdown on the tech industry.
The dollar index and Treasury yields extended overnight declines while oil and gold held gains.
U.S. stocks rose overnight, Treasury yields fell to a two-week low and the dollar plummeted to its lowest since April 2022, as investors cheered lowest inflation reading in over two years.
Data showed U.S. consumer price inflation rose 3 percent in June, marking their smallest year-on-year increase since March 2021, after 4 percent growth in May. Core inflation also moderated from 5.3 percent from 4.8 percent, easing pressure on the Fed to keep raising interest rates.
The tech-heavy Nasdaq Composite and the S&P 500 gained 1.2 percent and 0.7 percent, respectively to hit their best closing levels in over a year while the Dow edged up 0.3 percent.
European stocks rose sharply on Wednesday as investors reacted to the cooler-than-expected U.S. inflation reading and the Bank of England’s stress test results showing the U.K.’s big lenders would continue to be resilient.
The pan European STOXX 600 surged 1.5 percent to close higher for the fourth straight session. The German DAX rallied 1.5 percent, France’s CAC 40 climbed 1.6 percent and the U.K.’s FTSE 100 surged 1.8 percent.
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