Indian Shares Seen Higher As Fed Resumes T-bill Purchases

(RTTNews) - Indian shares look set to open a tad higher on Thursday, tracking a weaker dollar and a decline in U.S. bond yields after the Federal Reserve delivered another quarter-point rate reduction and announced it would begin buying $40 billion of Treasury bills per month starting Friday, in a move to ease short-term funding costs.

Benchmark indexes Sensex and Nifty fell around 0.3 percent each on Wednesday to extend losses for a third straight session while the rupee depreciated 7 paise to close at 89.94 against the U.S. dollar.

FIIs net sold shares worth Rs 1,651 crore on Wednesday, while domestic institutional investors net bought shares to the extent of Rs 3,752 crore, as per provisional exchange data.

Asian markets were broadly higher this morning, tracking overnight gains on Wall Street. Gold edged up slightly while oil prices fell after rising on Wednesday following the U.S.'s seizure of a sanctioned tanker off the coast of Venezuela.

Overnight, U.S. stocks closed higher after the Fed cut interest rates by quarter point, matching the rate cuts seen in September and October in another divided vote.

Short-term Treasury yields drifted lower after the Fed said it will launch a $40bn short-term bond-buying program to help manage market liquidity levels and support a softening labor market.

At a news conference following the decision, Fed Chair Jerome Powell said the Fed would have to "wait and see" before making its next move, adding a rate hike isn't in the base case.

Fed members suggested just one further cut in their 2026 central projection, but traders bet risks are skewed towards more cuts.

The Dow rallied 1.1 percent, the S&P 500 added 0.7 percent and the tech-heavy Nasdaq Composite gained 0.3 percent.

European stocks ended mixed on Wednesday as investors waited for the Fed's interest rate decision.

The pan European Stoxx 600 finished marginally higher. The German DAX slipped 0.1 percent and France's CAC 40 dipped 0.4 percent while the U.K.'s FTSE 100 edged up by 0.1 percent.