Sensex, Nifty Set For Muted Open As US Rate-cut Odds Dwindle

(RTTNews) - Indian shares are seen opening on a muted note Friday as U.S. interest-rate worries persist.

After the release of strong economic data, traders pushed back the timing for the first full quarter-point Federal Reserve interest-rate cut to December from November earlier.

On the positive side, there is some optimism among market participants that the higher-than-expected dividend transfer approved by the RBI will help improve liquidity in the Indian banking system and result in a fall in short-term rates.

Benchmark indexes Sensex and Nifty jumped around 1.6 percent each on Thursday after the RBI approved a massive, all-time high surplus transfer of Rs. 2,10,874 crores for FY24, boosting government revenues and aiding fiscal deficit target.

It is believed that the surplus transfer could help the government either borrow less in FY25 or step up capital expenditure.

Asian markets traded broadly lower this morning, with benchmark indexes in Australia, New Zealand, South Korea and Japan falling around 1 percent.

The dollar was on course for a weekly gain while Treasuries steadied after falling on Thursday.

Gold edged up slightly but was on track for its first weekly dip in three. Oil prices were little changed after four straight sessions of losses on demand concerns.

U.S. stocks gave up early gains to end lower overnight as interest-rate concerns overshadowed Nvidia's bumper revenue forecast.

Treasury yields climbed after data showed U.S. business activity grew at its fastest pace in more than two years in May.

Also, weekly jobless claims fell by more than anticipated last week, reinforcing resilience of the labor market.

The tech-heavy Nasdaq Composite fell 0.4 percent, the S&P 500 gave up 0.7 percent and the narrower Dow lost 1.5 percent.

European stocks ended mostly higher on Thursday, with Nvidia earnings and regional PMI data in focus.

The pan European STOXX 600 finished marginally higher. The German DAX ended flat with a positive bias and France's CAC 40 inched up 0.1 percent while the U.K.'s FTSE 100 shed 0.4 percent.