India’s equity benchmarks are set to open higher on Friday, mirroring Asian peers, after softer U.S. inflation print raised bets for further Federal Reserve easing next year.
The Gift Nifty futures were trading at 25,952.5 points as of 7:38 a.m. IST, indicating that the benchmark Nifty 50 will open above Thursday’s close of 25,815.55.
Asian markets rose 0.6% after the U.S. inflation data, with investors counting down to a likely hike in interest rates from the Bank of Japan that could cause waves for currencies and bonds.
U.S. consumer prices rose 2.7% year-on-year in November, against a forecast of 3.1% increase, raising expectations of a Fed rate cut.
However, analysts cautioned the data was distorted lower by the government shutdown and could not be taken at face value.
Lower interest rates in the U.S. make emerging market equities like India attractive for foreign portfolio investors as Treasury yields and dollar typically decline.
Foreign portfolio investors bought Indian equities worth 5.96 billion rupees ($65.93 million) on Thursday, provisional data showed, in their second straight session of buying after an aggressive sell-off earlier this month.
The Nifty and BSE Sensex fell 0.9% in the last four sessions due to concerns over FPI selling and a weakening rupee amid delays in a potential India-U.S. trade deal.
American Dollar Exchange Rate