Indian stocks appear poised for a higher opening on Thursday, responding positively to the Congressional testimony of Federal Reserve Chairman Jerome Powell. That said, volatility might be in the offing due to the market shutdown on Friday for the festival of Mahashivratri.
The benchmark Sensex and Nifty hit record highs on Wednesday before closing about half percent higher, buoyed by private sector banks and financial stocks. The Indian rupee appreciated by seven paise, concluding at 82.83 against the US dollar.
Asian markets operated in higher territory this morning, but regional gains were limited as Powell described the US economic outlook with uncertainty, indicating that curbing inflation was not a guarantee. He also emphasized that future interest rate decisions would be influenced by a careful evaluation of incoming data, changing outlooks, and risk balances.
The dollar index remained stable after Wednesday's fall, echoing lower bond yields. Gold hovered near its record high, while oil prices experienced a minor dip following Wednesday's sharp rise that was driven by escalating Middle East tensions and Saudi Arabia's decision to hike prices for its leading crude grade for Asia.
US stocks appreciated overnight after Powell hinted during his House of Representatives testimony that the Fed may reduce interest rates at some point this year, however, officials require "greater confidence" in inflation trajectories aiming closer to 2 percent.
Regarding economic trends, US job opportunities decreased slightly in January, and private sector employment fell short of expectations in February. In contrast, the Fed's Beige Book survey demonstrated modest expansion in the US economy in early 2024.
On the tech front, the Nasdaq Composite rose 0.6 percent, while the S&P 500 advanced half a percent, and the Dow ascended by 0.2 percent.
European stocks closed in the green zone on Wednesday as the British government revealed a growth-driven budget and data indicates a minor rebound in retail sales in the Eurozone for January. The Pan-European STOXX 600 rose by 0.4 percent, the German DAX made gains by 0.1 percent, France's CAC 40 lifted by 0.3 percent, and the UK's FTSE 100 improved by 0.4 percent.
