Indian shares set to open higher; Fed chair speech, closing auction volatility in focus
- GIFT Nifty futures were at 24,262 points
Indian shares are set for a higher open despite recent losses and market volatility, as investors await the Federal Reserve chair's speech for interest rate guidance.
- Recent volatility in India's stock market.
- Impact of elevated oil prices and US Treasury yields.
- Federal Reserve chair's speech on interest rate path.
Indian shares are expected to open higher on Friday after two straight sessions of losses, although caution may persist ahead of a speech by the Federal Reserve chair and after sharp swings during the new closing auction mechanism.
GIFT Nifty futures were at 24,262 points, as of 7:56 a.m. IST, indicating a positive start for the Nifty 50, which closed at 24,090.85 on Thursday.
The 50-stock index dropped 1% over the last two sessions and is headed for its third straight weekly loss as elevated oil prices and Treasury yields weighed on global risk assets.
Derivatives turnover on India’s BSE index was the lowest in 11 months for a monthly expiry session on Thursday, which saw an erratic closing auction session. The indicative close for the benchmark Sensex dropped over 3% briefly during the closing auction, before paring some losses and closing 0.7% lower.
The sharp swings in the cash market also triggered abnormal spikes in options premiums of the monthly Sensex contracts that were expiring on Thursday.
Meanwhile, Brent crude futures hovered around $89 per barrel on Friday.
Iran war mediators have placed renewed emphasis on reopening the Strait of Hormuz, with Tehran agreeing to draw up a list of conditions to restore normal traffic after a Qatari emissary pressed the Iranians to respect freedom of navigation.
US Treasury yields crept higher on Thursday as traders awaited Fed Chair Kevin Warsh’s appearance at the central bank’s Jackson Hole symposium on Friday for further clues on the interest rate path.
Higher yields raise borrowing costs and can also curb overseas inflows into riskier assets such as emerging market equities.
Foreign investors net sold Indian shares worth 2.98 billion rupees ($31.19 million) on Thursday, as per provisional data.
However, they have bought shares worth $3.15 billion so far in August - the highest for any month since September 2024 - and trimmed year-to-date outflows to $24 billion.
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