Indian Shares Set To Extend Gains On Easing Fed Hike Bets

(RTTNews) - Indian shares may open higher on Friday, extending gains from the previous two sessions as new data showed U.S. hiring slowed after a three-month streak of overperformance, supporting the case for the Federal Reserve to continue to hold rates steady for now.

U.S. jobs growth slowed sharply in June, and the two prior months' data were revised lower, raising expectations that the Fed will hold rates this month and potentially in September.

The June jobs report served as a reality check for the economy and challenged the narrative that the Fed may hike rates in the second half of this year.

Benchmark indexes Sensex and Nifty rose around 0.7 percent each on Thursday, adding to the previous session's gains as IT stocks rebounded from recent string of losses amid a weakening AI trade in other Asian countries like South Korea and Japan.

The rupee reversed course to settle 19 paise lower at 95.35 against the U.S. dollar as strong dollar demand from importers and corporate hedgers, along with foreign fund outflows, outweighed support from a continued fall in crude oil prices in international markets.

Domestic institutional investors net bought shares worth Rs 1,784.40 crore on Thursday, while foreign institutional investors net sold shares to the extent of Rs 311.82 crore, according to provisional exchange data.

Asian markets were mostly higher this morning despite an overnight fall in U.S. technology stocks.

The U.S. dollar index held steady after falling half a percent on Thursday. Gold jumped more than 1 percent to trade at $4,180 an ounce.

Brent crude futures were modestly higher above $72 a barrel, hovering near levels last seen before the Middle East conflict in late February on signs of improved shipping activity through the Strait of Hormuz and progress in U.S.-Iran talks.

Overnight, U.S. stocks ended mixed as a sell-off continued in the chip sector and weak jobs data prompted traders to trim bets on a Federal Reserve interest-rate increase this month.

Data showed the U.S. economy added 57,000 jobs in June, compared with the 114,000 expected and the downwardly revised 129,000 added in May.

The unemployment rate ticked down to 4.2 percent as more people left the labor force, pushing the participation rate to the lowest level in more than five years.

In other economic news, there was a steep drop in new orders for U.S. manufactured goods in May, while applications for jobless aid unexpectedly inched down last week.

The Dow jumped 1.1 percent to notch a record close ahead of the Independence Day holiday, while the S&P 500 ended little changed and the tech-heavy Nasdaq Composite shed 0.8 percent.

European stocks closed on a buoyant note on Thursday as inflation concerns eased and Germany's national coalition agreed on sweeping tax, labor and pension reforms.

The pan- European Stoxx 600 gained 1.4 percent. The German DAX surged 2.2 percent, while France's CAC 40 and the U.K.s FTSE 100 both rallied about 1.7 percent.