Sensex, Nifty To Open On Subdued Note As Rate Worries Resurface

Indian shares may open on a cautious note Friday as the dollar index recovered and Treasury yields jumped on signs of a resilient U.S. economy.

Earnings news and global cues may influence sentiment as the day progresses.

Benchmark indexes Sensex and Nifty gave up initial gains to end down about 0.7 percent and 0.6 percent, respectively on Thursday as monthly derivative contracts expired. The rupee rose by 7 paise to close at 81.93 against the dollar.

Foreign institutional investors offloaded shares worth a net Rs. 3,979.44 crore on Thursday, while domestic institutions purchased shares worth a net Rs. 2,528.15 crore, stock exchange data showed.

Asian stocks were mostly lower this morning and the yen extended a sharp rally amid speculation that the Bank of Japan may consider tweaking its yield curve control policy.

Oil prices fell in Asian trade after rising sharply on Thursday, with Brent crude topping $84 a barrel for the first time since April on signs of tighter supply.

U.S. stocks ended lower on Thursday and Treasury yields rose, as a slew of upbeat economic data clouded the outlook for interest rates.

The U.S. economy grew more than expected in the second quarter, weekly jobless claims continued to fall and new orders for key manufactured capital goods unexpectedly rose in June, raising concerns that interest rates could stay higher for longer.

The Dow dropped 0.7 percent to snap a 13-day winning streak despite upbeat earnings from big companies. The S&P 500 and the tech-heavy Nasdaq Composite both shed around 0.6 percent.

European stocks closed on a buoyant note on Thursday as the European Central Bank spoke about the possibility of pause at its next meeting after raising interest rates for the ninth consecutive time.

The pan-European STOXX 600 added 1.4 percent to hit a 17-month high. The German DAX rallied 1.7 percent, France’s CAC 40 climbed 2.1 percent and the U.K.’s FTSE edged up 0.2 percent.