Indian equities are positioned for a favorable opening on Thursday, buoyed by market expectations of two Federal Reserve rate cuts in 2024, with the first anticipated in September.
Investor focus will primarily be on Q1 earnings reports and the forthcoming budget. Analysts are forecasting subdued earnings, attributed to the high base effect.
Tata Consultancy Services, the leading IT services company in India, is set to announce its financial performance today, with prospects indicating a decline in profits and margins.
On Wednesday, benchmark indices Sensex and Nifty each experienced a decline of approximately half a percent, as investors looked to secure profits and gather insights ahead of the upcoming earnings season. The rupee marginally dropped by 2 paise, settling at 83.51 against the dollar.
This morning, Asian markets were predominantly higher, driven by expectations that a U.S. government report later in the day would reveal continued moderation in June's inflation rates.
The dollar remained steady after its decline on Wednesday. Gold edged up amid decreasing yields and speculation of rate cuts, while oil extended its overnight gains following a strong oil demand forecast from OPEC.
In his second day of testimony before Congress on Wednesday, Fed Chair Jerome Powell noted that the labor market is cooling, and indicated that the U.S. central bank might cut its main rate before inflation reaches its 2% target.
U.S. stocks witnessed significant gains overnight, as investors prepared for critical economic data and upcoming corporate earnings releases.
The S&P 500 surged by 1%, closing above 5,600 for the first time, while the tech-heavy Nasdaq Composite rose 1.2%, marking its seventh consecutive session of gains, supported by Taiwan Semiconductor Manufacturing's robust June sales performance. The Dow Jones Industrial Average climbed 1.1%, ending just below its own record.
European stocks saw a resurgence on Wednesday, ending a three-day losing streak, following Powell's comments which provided limited guidance on rate cuts.
The pan-European STOXX 600 increased by 0.9%. Germany’s DAX and France’s CAC 40 both rose by 0.9%, while the U.K.’s FTSE 100 gained 0.7%.
