Indian shares look set to open sharply higher on Thursday, with positive global cues, falling oil prices and the latest bout of dollar weakness likely to boost investor sentiment on eve of expiry of November series derivative contracts.
The dollar sagged against its major peers after Federal Reserve Chairman Jerome Powell said interest rates are currently “just below the broad range of estimates of the level that would be neutral for the economy.” Powell’s comments suggested that the Fed’s three-year tightening cycle is drawing to a close.
Meanwhile, U.S. crude oil futures for January delivery ended down $1.27 or 2.5 percent at $50.29 a barrel on Wednesday, the lowest settlement in thirteen months, after data released by the Energy Information Administration showed yet another increase in crude stockpiles for the tenth straight week.
Oil clawed back some losses in Asian trade but analysts are looking for more downside.
Benchmark indexes Sensex and the Nifty rose around half a percent on Wednesday to extend gains for the third consecutive session, while the rupee jumped 17 paise to close at 70.62 against the dollar.
The central government on Wednesday released the much-awaited back-series estimates for India’s GDP showing a lower rate of growth for the 2005-12 fiscal years than what was estimated using the previous methodology.
Asian stocks remain broadly higher this morning, with benchmark indexes in Australia, China, Japan and South Korea rising between 0.2 percent and 0.9 percent on speculation that the Fed might pause lifting interest rates next year.
The upside was capped amid caution ahead of the Trump-Xi meeting and after the Bank of England’s warning that a no-deal Brexit could spark a recession.
Overnight, U.S. stocks posted strong gains as investors interpreted Powell’s remarks as dovish for interest rates.
The Dow rallied 2.5 percent, the tech-heavy Nasdaq