Indian equities are anticipated to open largely unchanged on Thursday as investors digest favorable U.S. inflation figures and look forward to the release of domestic CPI inflation and industrial production data later today for further guidance.
Union Bank of India suggests that India's industrial production, as reflected by the Index of Industrial Production (IIP), may have experienced an annual growth rate of 3.7% in October, up from 3.1% in the preceding month. Meanwhile, Morgan Stanley projects that retail inflation, measured by the Consumer Price Index (CPI), is likely to decrease to 5.5% in November, driven by reductions in food prices.
On Wednesday, the benchmark indices, Sensex and Nifty, traded within a narrow band before ending slightly higher. This movement comes amidst growing anticipation of a potential policy shift from the Reserve Bank following Sanjay Malhotra's appointment as the new Governor.
The Indian rupee appreciated by 2 paise, closing at 84.83 against the U.S. dollar, after reaching an all-time low of 84.87 during the day's intraday trading.
This morning, Asian markets mostly advanced, with Japan's Nikkei climbing nearly 1.5%, buoyed by tech stocks mirroring gains made by their U.S. counterparts the previous night.
Reports indicate that Chinese leaders and policymakers might be considering devaluing the yuan in response to looming trade tensions with the U.S. Despite higher U.S. yields, the dollar index declined slightly, while gold maintained its position above $2,700 per ounce.
Oil prices reduced following an overnight rise amid potential European Union sanctions on Russia and anticipated increased demand from China. Additionally, media sources report potential further U.S. sanctions on Russia's energy sector.
U.S. equities broadly increased overnight. The dollar touched a two-week peak as inflation figures in line with forecasts supported the expectation that the Federal Reserve will lower interest rates by another quarter of a percentage point next week.
Data revealed that the U.S. consumer price index increased by 0.3% in November, marking the most significant rise since April, following a consistent 0.2% rise over the preceding four months. Year-over-year, inflation climbed to 2.7% last month, slightly up from 2.6% in October. Core inflation remained steady, advancing by 0.3% for the fourth consecutive month, aligning with projections of an annual rate of 3.3%.
The tech-dominated Nasdaq Composite soared 1.8%, reaching a new record high and surpassing the 20,000 mark for the first time. The S&P 500 progressed by 0.8%, nearing a record high, while the Dow experienced a slight dip of 0.2%.
In Europe, stock markets closed higher on Wednesday as U.S. inflation data met expectations and Chinese President Xi Jinping assured that China would meet its 5% GDP growth objective. The pan-European STOXX 600 increased by 0.3%, with both Germany’s DAX and the U.K.’s FTSE 100 gaining approximately 0.3%, and France’s CAC 40 rising by 0.4%.
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