Indian shares set to open higher on US rate-cut euphoria

BENGALURU: Indian shares are set to open higher on Friday, as an outsized interest rate reduction by the US Federal Reserve and the anticipation of a soft landing for the world’s largest economy boosted risk appetite across global markets.

The GIFT Nifty was at 25,523 points, as of 07:55 a.m. IST, indicating the NSE Nifty 50 will open slightly above its close of 25,415.8 on Thursday.

Other Asian markets opened higher, with the MSCI Asia ex-Japan index.

China markets were the only exception, with the blue-chip CSI 300 losing about 0.3%, after the central bank held its benchmark lending rates steady, hurting expectations of further policy support to revive its economy.

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Wall Street equities closed higher overnight, with the S&P 500 hitting a record high.

The larger-than-expected Fed’s rate cut on Wednesday and data showing smaller-than-expected weekly jobless claims on Thursday injected optimism that the US economy could achieve soft landing – a scenario of cooling inflation without triggering an economic recession.

India’s benchmark indexes NSE Nifty 50 and S&P BSE Sensex hit record highs on Thursday.

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“Foreign inflows into India could accelerate if the Fed easing cycle triggers a risk-on rally in the US, creating enough momentum to protect domestic markets against downsides,” said Seshadri Sen and Arthkumar Gandhi, analysts at Emkay Global.

Among individual stocks, private lender Axis Bank will be in focus after the country’s market regulator on Thursday barred its investment banking unit Axis Capital from acting as a merchant banker for new debt issues for allegedly violating rules.

The Indian bank said Axis Capital is of the view that activities in debt segment were in compliance with regulators and will continue to operate in all other segments including in equity markets.