Indian equities are anticipated to start Thursday on a positive trajectory, bolstered by a tech-fueled rally on Wall Street the previous night. However, a stronger dollar and a recovery in oil prices might somewhat temper the overall gains.
In the U.S., core inflation for August exceeded expectations, dampening hopes for a significant 50-basis-point reduction in Federal Reserve rates.
The U.S. producer price index and initial jobless claims data, set for release later today, could provide new insights into the central bank's interest rate strategy ahead of next week's Federal Reserve meeting.
On Wednesday, benchmark indices Sensex and Nifty fluctuated before closing down by approximately half a percent each. The rupee remained stable, settling at 83.98 against the dollar.
Asian markets showed broad gains this morning, with Japanese stocks experiencing the most significant rise in nearly a month, buoyed by the yen's pullback from its strongest level against the dollar since December.
The dollar hovered near a four-week high against the euro, gold saw a slight increase, and oil prices continued to rise amid expectations of supply disruptions due to Hurricane Francine.
U.S. stocks reversed their losses to close higher overnight. Brent crude prices bounced back from 3.5-year lows, and a critical inflation report indicated slowing price growth, strengthening anticipations of a 25-basis-point rate cut at the upcoming FOMC meeting.
The tech-heavy Nasdaq Composite surged by 2.2%, the S&P 500 climbed 1.1%, and the Dow increased by 0.3%.
Data revealed that the consumer price index slowed to an annual rate of 2.5% in August from 2.9% in July, the lowest figure since February 2021. The core consumer price index, which excludes food and energy costs, rose more than anticipated, increasing by 0.3% from July, the highest in four months, and by 3.2% from a year earlier.
European stocks closed mixed on Wednesday as investors awaited guidance from the upcoming ECB and Fed meetings.
The pan-European STOXX 600 ended flat with a slight positive bias. Germany's DAX edged up 0.4%, while France's CAC 40 slipped 0.1%, and the U.K.'s FTSE 100 dipped 0.2%.
