Sensex, Nifty Seen Opening Up On Growth Optimism

Indian shares look set to open higher on Wednesday as investors react to positive macroeconomic data.

India’s consumer price inflation slowed more than expected in September, while industrial production grew in line with expectations in August, separate reports showed.

The consumer price index rose 4.35 percent year-on-year following a 5.30 percent in August. Economists had forecast a 4.50 percent increase.

Industrial production rose 11.9 percent year-on-year in August while economists had forecast 12.0 percent increase.

India will be the fastest growing major economy in the world in fiscal 2022, said the International Monetary Fund (IMF) on Tuesday while retaining the country’s GDP forecasts at 9.5 percent in 2021 and 8.5 percent for 2022.

Benchmark indexes Sensex and the Nifty eked out modest gains on Tuesday to reach record closing highs while the rupee declined by 16 paise to close at 75.52 against the dollar, extending losses for the third day running.

Asian markets traded mixed this morning, a day after China Evergrande Group missed its third round of bond payments in three weeks, intensifying market fears over contagion.

The dollar held near a one-year high against versus major peers after three Fed officials including Vice Chair Richard Clarida said that the U.S. economy has healed enough to begin to scale back the central bank’s asset-purchase program. Oil held above $ 80 a barrel in Asian trade after a four-day advance.

U.S. stocks ended lower for the third consecutive session overnight as investors waited to see how companies are coping with price increases.

A downward revision in global growth forecast by the IMF and expectations that the Fed could begin scaling back asset purchases as early as next month also weighed on markets.

The Dow dipped 0.3 percent, the tech-heavy Composite slipped 0.1 percent and the S&P 500 eased 0.2 percent.

European stocks ended Tuesday’s session on a subdued note amid rising concerns over inflation, pressures on quarterly earnings and Chinese real estate giant Evergrande’s debt woes.

The pan European Stoxx 600 ended flat with a negative bias. The German DAX and France’s CAC 40 index both dipped 0.3 percent while the U.K.’s FTSE 100 shed 0.2 percent.