Indian Shares Set To Open Higher On Dovish Fed Comments

Indian shares were poised to open higher on Friday following four days of declines, as reduced expectations of a US Federal Reserve rate hike this month boosted global equities and put downward pressure on bond yields. Federal Reserve Governor Christopher Waller indicated on Thursday that he would back maintaining interest rates steady at the US central bank’s upcoming policy meeting if recent data suggests easing inflation pressures.

The likelihood of a Fed rate increase at the mid-September meeting slipped to about 50%, down from roughly 63% the previous day, according to CME FedWatch. GIFT Nifty futures were trading at 24,034.5 points by 7:48 a.m. IST, signaling a favorable opening for the Nifty 50 index, which had closed at 23,873.45 on Thursday. The Nifty 50 and BSE Sensex have slipped 1.3% and 1.4% respectively over the week, trailing a fourth week of losses as higher crude oil prices and bond yields dampened investor sentiment.

Brent crude futures were hovering around $96 per barrel, as market participants weighed risks from escalating tensions in the Middle East against hopes for a resolution to the Russia-Ukraine conflict. Asian equities were up 1% in the morning session. The Indian stock market regulator announced on Thursday that it would examine the methodology employed to calculate derivatives settlement prices following feedback received on the volatility of the equity cash market's closing auction session.

Foreign investors divested Indian shares worth 2.35 billion rupees ($24.87 million) on Thursday, according to provisional data.