Sensex, Nifty Set For Gap-up Opening After Wall Street Rally

(RTTNews) - Indian shares look set to open sharply higher on Friday, tracking firm global cues and better-than-expected quarterly earnings from IT firms Infosys and MindTree.

Infosys raised its annual revenue forecast and announced a Rs. 9,300 crore share buyback after reporting a 11 percent rise in Q2 profit, while Mindtree reported 27.5 percent rise in net profit for the September quarter.

Benchmark indexes Sensex and Nifty fell around 0.7 percent and 0.6 percent, respectively on Thursday amid the weekly F&O expiry. The rupee settled 5 paise lower at 82.38 against the dollar amid weak domestic macroeconomic data.

Asian markets followed Wall Street higher, with benchmark indexes in China, Japan, Hong Kong, South Korea and Australia climbing 2-3 percent.

The dollar index traded weak in Asian trade and benchmark U.S. 10-year Treasury yields were slightly off a 14-year peak touched on Thursday, while oil extended overnight gains after data showed a significant drop in distillate inventories in the U.S. in the week ended October 7th.

After a red-hot U.S. inflation reading, Fed Fund Futures are now pricing another 125 bps of rate hikes in the remaining two FOMC meetings in 2022.

U.S. stocks reversed course to post strong gains overnight even as the September inflation report showing core inflation at a 40-year high poured cold water on hopes of Fed pivot.

Consumer prices rose 0.4 percent in September compared to August, while economists had expected a 0.2 percent increase.

The S&P 500 hit its lowest level since November 2020 before seeing a sharp turnaround to close 2.6 percent higher. The Dow climbed 2.8 percent and the tech-heavy Nasdaq Composite surged 2.2 percent.

European stocks also closed higher on Thursday after reports emerged that the U.K. government was discussing possible changes to its fiscal plan.

The pan European Stoxx 600 rose 0.9 percent. The German DAX rallied 1.5 percent, France's CAC 40 index gained 1 percent and the U.K.'s FTSE 100 added 0.4 percent.