Sensex, Nifty To Follow Global Peers Higher As Fed Signals Rate Cut

Indian shares look set to open higher on Thursday, tracking upbeat cues from global markets after the U.S. Federal Reserve provided clear signals for a possible interest rate cut that investors much hoped for.

On the earnings front, Coal India, Maruti Suzuki India, Tata Steel, Adani Power are among the prominent companies that have declared their quarterly earnings after market hours on Wednesday.

ITC, Sun Pharmaceutical Industries, Tata Motors, Zomato, Adani Enterprises and Adani Ports and Special Economic Zone are due to unveil their financial results later today.

Oil and gas stocks could see increased activity today as crude oil prices surged in international markets and the government cut windfall tax on domestically produced crude oil to Rs 4,600 per ton from previous Rs 7,000 per ton.

Benchmark indexes Sensex and Nifty eked out modest gains on Wednesday while the rupee closed on a flat note after slipping to a record low of 83.74 against the dollar earlier.

Asian markets were broadly higher this morning, though Japan’s Nikkei index fell over 3 percent as the yen extended its blockbuster rally to reach a 4-1/2-month high, clouding the outlook for the country’s exporters.

Elsewhere, a private survey showed China’s manufacturing sector unexpectedly shrank in July, highlighting the need for stronger stimulus.

The dollar nursed losses in Asian trade and gold held steady near a two-week high while oil extended gains after surging about 4 percent in the previous session as the killing of a Hamas leader in Iran raised the threat of a wider Middle East conflict.

U.S. stocks rallied overnight as investors cheered Fed Chair Jerome Powell’s dovish remarks and upbeat earnings from the likes of AMD, Starbucks and DuPont.

After keeping the key interest rate unchanged at a 23-year high, Powell said that recent progress on inflation and cooling in the labor market could put the September rate cut on the table.

The heavy Nasdaq Composite surged 2.6 percent, helped by a revival in tech stocks led by Meta and Nvidia.

The S&P 500 rallied 1.6 percent to post its best daily performance since February and the Dow edged up 0.2 percent.

European stocks extended gains for a second straight session on Wednesday as strong corporate earnings helped offset data showing an unexpected rise in Eurozone inflation in July.

The pan European STOXX 600 advanced 0.8 percent. The German DAX rose half a percent, France’s CAC 40 added 0.8 percent and the U.K.’s FTST 100 climbed 1.1 percent.