Sensex, Nifty Seen Up Despite Alarming Inflation Data

Indian shares look set to open higher on Friday after Wall Street stocks ended little changed overnight and Asian markets climbed amid signs the recent equity market sell-off is overdone.

The upside, however, may be capped by inflation and rate-hike concerns after data showed India's retail inflation surged to an eight-year high of 7.79 percent in April, raising the prospect of another interest rate hike from the RBI in the next policy meeting in June.

Benchmark indexes Sensex and the Nifty tumbled over 2 percent each on Thursday to extend losses for the fifth straight session and the rupee hit a record low as lingering worries surrounding inflation and rising interest rates spooked investors.

Asian markets advanced this morning and U.S. stocks futures inched higher as the U.S. Senate confirmed President Joe Biden's appointment of Jerome Powell to a second term as Federal Reserve Chair.

Powell said that getting inflation under control could cause some economic pain but remains his top priority. A 50-bps rate hike could continue longer and the Fed isn't "actively considering" a 75 basis-point move, he added.

Elsewhere in China, Beijing officials denied the city will be locked down. The dollar traded firm and Bitcoin added about 2.5 percent to top $29,000, while oil prices climbed but headed for their first weekly decline in three weeks on demand concerns.

U.S. stocks seesawed before ending narrowly mixed overnight after wholesale prices showed another increase and initial jobless claims unexpectedly rose, raising more concerns about a potential pullback in spending that could crimp economic growth.

The tech-heavy Nasdaq Composite finished marginally higher, while the S&P 500 slipped 0.1 percent and the Dow eased 0.3 percent.

European stocks declined on Thursday amid worries that faster-than-expected monetary policy tightening might tip the global economy into recession.

The pan European Stoxx 600 gave up 0.8 percent. The German DAX dropped 0.6 percent, France's CAC 40 index lost 1 percent and the U.K.'s FTSE 100 tumbled 1.6 percent.

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