Sensex, Nifty Set To Open Higher On US Rate Cut Hopes

Indian shares look set to open on a buoyant note Monday amidst expectations of a U.S. rate cut in September.

On the earnings front, Bandhan Bank, Dr Reddy’s Laboratories, ICICI Bank, IndusInd Bank, KEC International, PNB and Power Grid are among the prominent stocks that will react to their financial results released after market hours on Friday.

Meanwhile, ACC, BEL, Adani Total Gas and HPCL are due to report their earnings later today.

Last week, benchmark indexes Sensex and Nifty traded lower for the most part of the week before staging a smart rebound on Friday to end higher by 0.9 percent and 1.2 percent, respectively for the week, logging their eighth consecutive week of gains.

Foreign institutional investors turned net sellers last week following the government’s proposals on security transaction tax and short-term capital gains tax in the Budget.

Asian markets traded mostly higher this morning, with Japan’s Nikkei index rallying over 2 percent amid expectations the Bank of Japan will raise interest rates at its policy meeting on July 30.

Rate decisions from the Fed and the Bank of England, upcoming Chinese factory activity data and some big tech earnings releases in the U.S., including Apple Inc., Amazon.com Inc and Microsoft Corp. also remain on investors’ radar this week.

The dollar held steady, and Treasuries were little changed while oil steadied near a six-week low ahead of a key OPEC+ meeting this week.

Gold prices rose toward $2,400 per ounce as tensions in the Middle East showed little sign of abating.

Turkish President Recep Tayyip Erdogan escalated tensions with Israel on Sunday, suggesting the possibility of military action against the Jewish state amid ongoing conflict with the Iranian proxy group Hezbollah.

U.S. stocks climbed on Friday to finish a turbulent week on a positive note as a benign June PCE inflation report lifted hopes for more interest rate cuts this year.

Data showed the personal consumption expenditures (PCE) price index inched up by 0.1 percent in June, matching expectations. The annual growth rate slowed to 2.5 percent from 2.6 percent in May.

Personal income rose by less than expected in June while personal spending increased in line with estimates. A measure of U.S. consumer sentiment deteriorated by slightly less than previously estimated in July.

The Dow surged 1.6 percent, the tech-heavy Nasdaq Composite rallied 1 percent and the S&P 500 added 1.1 percent.

European stocks closed on a firm note Friday as a global sell-off eased and investors reacted to a slew of encouraging earnings updates.

The pan European STOXX 600 jumped 0.8 percent. The German DAX gained 0.7 percent, while France’s CAC 40 and the U.K.’s FTSE 100 both jumped by 1.2 percent.

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