Sensex, Nifty Seen Lower At Open After Strong Rally

(RTTNews) - Indian shares may drift lower at open on Friday after U.S. stocks fell for a fifth day running overnight, underscoring a cautious start to the year.

A surging dollar and elevated U.S. Treasury yields may also weigh on markets as signs of a resilient U.S. labor market provided support for the Federal Reserve's measured approach to lowering interest rates.

Benchmark indexes Sensex and Nifty jumped 1.8 percent and 1.9 percent respectively on Thursday, with auto stocks and financials leading the surge ahead of the upcoming quarterly earnings season.

The rupee fell by 9 paise to close at 85.73 against the greenback due to strong dollar demand from importers.

Asian stocks were mostly higher this morning, with Japanese markets closed for a holiday. Regional gains were driven by optimism surrounding potential interest rate cuts in China and positive news from South Korea's tech sector.

The People's Bank of China plans to cut interest rates "at an appropriate time" this year, the Financial Times reported citing comments from the central bank.

Technology stocks soared in Seoul after SK Hynix announced that it will showcase its innovative AI memory technologies at CES 2025, to be held in Las Vegas from January 7 to 10.

The dollar headed for its best week since November, while gold was little changed, following a 1 percent gain the previous day.

Oil extended gains after settling up by more than $1 a barrel on Thursday on optimism around China's economy and fuel demand after a pledge by President Xi Jinping to promote growth.

U.S. stocks fluctuated before ending lower overnight and the dollar hit a two-year high after data showed weekly jobless claims unexpectedly dropped to an eight-month low, reigniting worries about high interest rates.

Sentiment was also dented by Tesla's annual sales drop and reports suggesting that Apple is offering some pretty huge discounts on its latest phones in China.

The tech-heavy Nasdaq Composite and the S&P 500 both slipped around 0.2 percent, notching their fifth straight daily decline, the longest skid since April. The Dow dipped 0.4 percent.

European stocks closed higher on Thursday, shrugging off early weakness as data showed the downturn in the euro zone and U.K. manufacturing sectors deepened at the end of 2024.

The pan European STOXX 600 advanced 0.6 percent. The German DAX rose 0.6 percent, France's CAC 40 edged up by 0.2 percent and the U.K.'s FTSE 100 added 1.1 percent.

Energy stocks surged after a sharp increase in natural gas prices as the region braced for freezing winter temperatures without Russian supplies delivered via Ukraine.