India’s stock benchmarks set to open higher on easing inflation, global optimism

India’s stock benchmarks are poised to open higher on Thursday, extending their three-sessions winning streak, as sentiment improves on cooling domestic inflation, optimism over a U.S. government reopening and easing trade worries.

Gift Nifty futures were trading at 25,950.5 points as of 8:00 a.m. IST, indicating that the Nifty 50 (.NSEI), opens new tab will open above Wednesday’s close of 25,875.80.

Both benchmarks have risen 1.5% so far this week and are now trading less than 2% below their record highs hit in September 2024.

U.S. President Donald Trump’s upbeat comments about a trade deal with India earlier this week, hopes that the U.S. government will soon reopen and firming bets for a Federal Reserve rate cut in December have all supported the rally.

Sentiment was further buoyed after India’s retail inflation slumped to a record low of 0.25% in October, driven by a sharp drop in food prices and tax cuts on consumer goods, paving the way for a Reserve Bank of India rate cut next month.

Additionally, exit polls showing the ruling National Democratic Alliance on track to retain power in Bihar bolstered risk appetite as it signalled policy continuity and government stability, said Nandish Shah, deputy vice president of HDFC Securities.

The election results will be announced on Friday and any surprise loss for the NDA could trigger a 5%-7% correction in Indian markets, said InCred Equities.

The Nifty and Sensex have run up about 5% each since the start of October, helped by improving earnings outlook.

Across Asia, markets edged higher, after the Dow Jones logged a record closing high overnight, with investors hopeful that an end to the U.S. government shutdown would allow key economic data releases to resume.