Indian shares are poised to open higher on Friday, buoyed by softer-than-expected U.S. inflation data, which has fueled optimism for two possible Federal Reserve rate cuts this year.
However, market volatility remains a possibility due to uncertainties surrounding quarterly earnings reports and rising oil prices, indicating stronger demand.
Late Thursday, Tata Consultancy Services (TCS) reported an 8.7 percent increase in first-quarter net profit for fiscal 2024-25 (FY25), despite a year-on-year decline in several business segments.
Investors are also anticipating the release of Industrial Production (IIP) and Consumer Price Index (CPI) inflation data later today for further economic insights.
Benchmark indices, Sensex and Nifty, closed marginally lower on Thursday, continuing a two-session losing streak amid the weekly options expiry of the Nifty 50 contracts. The Indian rupee weakened by 4 paise, settling at 83.56 against the U.S. dollar.
Asian markets exhibited mixed performance this morning. Technology stocks mirrored their U.S. counterparts' downward trend, while a surge in the yen spurred speculation of potential intervention by Japanese authorities to support the currency.
Gold prices dipped in Asian trading, following a surge above the $2,400 per ounce mark on Thursday, reaching its highest level since May 22.
Oil prices continued to rise, driven by signs of increased summer demand and optimism about potential U.S. interest rate cuts.
U.S. stocks fell overnight, despite consumer price data showing an unexpected decline in June from the previous month, further supporting hopes for Federal Reserve rate cuts this year. Treasury yields decreased as the CPI fell 0.1 percent from May, the weakest monthly reading since May 2020, bringing the annual rate to 3 percent, down from 3.3 percent.
The annual core consumer price growth rate also slowed to 3.3 percent from 3.4 percent.
The Nasdaq Composite, heavily weighted in technology, dropped 2 percent, and the S&P 500 declined 0.9 percent after both hit new intraday highs earlier in the session. The Dow Jones Industrial Average ended virtually unchanged but with a positive bias.
European stocks climbed for a second consecutive session on Thursday, boosted by promising inflation data from Germany, GDP figures from the U.K., and U.S. CPI data.
The pan-European STOXX 600 index advanced 0.6 percent. Germany's DAX and France's CAC 40 both increased by approximately 0.7 percent, while the U.K.'s FTSE 100 gained 0.4 percent.
