Sensex, Nifty Set For Positive Start On Hopes Of Less Hawkish Fed

Indian shares are seen opening on a positive note Friday as other Asian markets held steady despite steep losses on Wall Street and in Europe overnight.

Earnings news flow, currency movements and global cues may sway sentiment as the day progresses.

FMCG stocks could be in focus after Hindustan Unilever met Street estimates with a 12 percent rise in quarterly profit but said its board had approved raising the royalty payment to parent Unilever by 80 basis points.

Reliance Industries, India's largest company by market capitalization, is set to unveil its quarterly earnings later in the day.

Benchmark indexes Sensex and Nifty ended Thursday's session modestly lower after two consecutive sessions of gains. The rupee dropped 7 paise to close at 81.37 against the dollar amid foreign fund outflows.

Asian markets were broadly higher this morning after Federal Reserve Bank of New York President John Williams along with a number of other Fed officials expressed support for a downshift in the pace of rate rises.

The dollar eased and headed for a second consecutive weekly decline on expectations that the Fed might end its tightening cycle after a 25-basis point hike at each of its next two policy meetings.

Gold held little changed near a nine-month high while oil headed for a second weekly advance on optimism over stronger Chinese demand.

U.S. stocks fell for a third straight session overnight, with recession worries and political brinkmanship around raising the debt ceiling denting sentiment.

While the latest housing data provided further evidence of deceleration in the economy, new claims for unemployment benefits unexpectedly fell last week, adding to concerns that the Fed could overtighten policy.

The Dow and the S&P 500 both shed around 0.8 percent, while the tech-heavy Nasdaq Composite lost 1 percent.

European stocks suffered their worst single-day sell-off of the year on Thursday as ECB President Christine Lagarde and fellow policymaker Klaas Knot signaled that interest rates have to rise further to rein in inflation.

The pan European STOXX 600 fell 1.6 percent. The German DAX tumbled 1.7 percent, France's CAC 40 index plunged 1.9 percent and the U.K.'s FTSE 100 declined 1.1 percent.

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