Indian stock benchmarks likely to open higher on US rate cut optimism

India’s equity benchmarks are likely to open higher on Tuesday, in line with their Asian peers, as rising expectations of a U.S. rate cut this month lifted investor sentiment for risk assets.

Gift Nifty futures were trading at 24,950 points as of 07:40 a.m. IST, indicating that the Nifty 50 will open above Monday’s close of 24,773.15.

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MSCI’s broadest index for Asia-Pacific stocks outside Japan rose 0.8%, while Japan’s Nikkei jumped nearly 1%, aided by a weaker yen and following the resignation of Prime Minister Shigeru Ishiba, a fiscal hawk.

Bets for a U.S. rate cut at the Federal Reserve’s September 16-17 meeting rose after data showed fewer-than-expected job additions in the world’s largest economy in August.

Lower U.S. interest rates make emerging markets such as India attractive for foreign portfolio investors (FPIs).

On Monday, FPIs sold Indian shares worth 21.7 billion rupees ($246.7 million), per provisional data, marking their eighth consecutive session of selling due to concerns over the impact of steep U.S. tariffs on Indian goods and relatively higher valuations.