Indian shares are poised for a muted start on Friday, following their best day in over two weeks during the previous session, as the global rally driven by hopes of U.S. interest rate cuts has subsided.
The Gift Nifty was trading at 22,480 as of 8:11 a.m. IST, indicating that the Nifty 50 will open near Thursday’s close of 22,403.85.
All three major Wall Street indexes closed lower overnight, with the Dow Jones Industrial Average and the Nasdaq Composite reversing course after hitting fresh record highs during intraday trading.
The decline followed data showing a fall in weekly jobless claims, suggesting a tight labor market. An increase in U.S. import prices indicated ongoing price pressures.
This data dampened hopes for early rate cuts, despite cooler-than-expected inflation data for April.
Asian markets started the day subdued. India’s benchmark indexes gained about 0.9% each on Thursday, marking their best session since April 29. Volatility hovered around 19-month levels due to sustained foreign selling and concerns over the outcome of national elections.
“Concerns regarding consistent FII selling, India VIX still above 20 levels, ongoing general election polling, and the outcome could keep volatility higher,” said Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services.
IT stocks and Mahindra & Mahindra boosted Indian shares to their best session in over two weeks.
Foreign portfolio investors (FPIs) have offloaded shares worth 276.19 billion rupees ($3.31 billion) in May so far, marking the highest level of outflows in 16 months since January 2023.
The Nifty 50 has gained 1.58% this week, setting it up to be its best week since early February.
