Sensex, Nifty set to open higher amid strong global cues

Sensex and Nifty are poised to kick off the trading day on a positive note, aligning with the upward trajectory observed in Asian markets. This follows a discernible shift in sentiment spurred by US labour market data signalling a cooling economy. The lacklustre job momentum in the United States has bolstered expectations of potential rate cuts by the Federal Reserve, affording the central bank more room to counteract inflationary pressures.

As of 8:20 am, the GIFT Nifty was at 21,912 points, indicative of a promising opening for the NSE Nifty 50, which had closed at 21,697.45 on the preceding day. Wall Street closed higher, and Asian markets have mirrored the trend, setting the stage for a positive start in Indian markets.

Thursday's data from the US labour market, coupled with the Federal Reserve's rate pause on Wednesday, has intensified speculation about the timing of potential rate cuts. Fed Chair Jerome Powell, while affirming the robustness of the economy, hinted at rates having peaked. The odds of a 25 basis points rate cut in May have surged to 59.6 per cent, up from 46.3 per cent, according to CMEGroup's FedWatch Tool.

Abhishek Goenka, Founder and CEO of IFA Global, noted, "While the Fed refrained from committing how soon it would cut rates, it acknowledged cooling inflation and that rates are at their peak." Investors are now eagerly awaiting the January non-farm payroll report, crucial for gauging the Fed's timing in initiating its rate easing cycle.

In the domestic arena, India's Nifty 50 and BSE Sensex witnessed marginal losses on Thursday following the government's announcement in the interim budget, wherein it outlined plans to narrow the fiscal deficit in fiscal 2025. Dhiraj Relli, MD and CEO of HDFC Securities, commented that the commitment to fiscal consolidation would be well-received by both global and local investors. Relli added that the interim budget is expected to exert a "neutral to mildly positive" influence on the Indian markets in the near term.

(With Reuters inputs)