Sensex, Nifty Set To Join Global Rally As Fed Worries Ease

(RTTNews) - Indian shares may follow global peers higher today and the rupee is tipped to strengthen, as cooler-than-expected U.S. inflation data suggested that the Federal Reserve's efforts to contain inflation are having an effect.

While traders now price in a 50-bps point hike at the Fed's policy meet in December, upcoming economic data will likely sharp how long officials keep raising rates beyond December.

Benchmark indexes Sensex and Nifty fell around 0.7 percent each on Thursday to extend losses from the previous session, while the rupee weakened to 81.81 per dollar after having strengthened over the last three days.

Asian markets followed Wall Street higher, and the dollar fell sharply while gold traded flat after rallying nearly 3 percent on Thursday to a more than two-month high.

Oil eked out modest gains, with concerns over China's zero-COVID policy and related lockdowns capping the upside.

U.S. stocks rose the most in more than two and a half years overnight, the dollar tumbled and the yield on the two-year Treasury note saw its biggest drop since October 2008, as weak inflation data raised hopes of Fed easing and a soft landing for the economy.

U.S. consumer inflation rose 0.4 percent in October, pushing the annual increase below 8 percent for the first time in eight months, data showed.

The Dow jumped 3.7 percent to reach its best closing level in almost three months and the S&P 500 soared 5.5 percent to hit a two-month closing high while the tech-heavy Nasdaq Composite skyrocketed 7.4 percent.

European stocks logged an 11-week closing high amid bets that U.S. inflation has peaked and the Federal Reserve would soon start scaling down the size of interest-rate hikes.

The pan-European STOXX 600 climbed 2.8 percent to log its biggest percentage gain in five weeks. The German DAX spiked 3.5 percent, France's CAC 40 index surged 2 percent and the U.K.'s FTSE 100 added 1.1 percent.