Sensex, Nifty Seen Up As Bets On Rate Hike Ease

(RTTNews) - Indian shares look set to open a tad higher on Friday as the odds that the Federal Reserve would opt for a 100-bps rate hike at the upcoming policy meeting remain very low.

Amid growing signs of recession, two Fed officials indicated on Thursday they favored a 75-bps rate hike at the July 26-27 meeting.

Underlying sentiment, however, may remain cautious on fears that central bank moves to fight inflation would spark a recession.

Concerns about China's property crisis and weaker-than-expected earnings from big U.S. banks may also keep investors at bay ahead of the weekend.

Meanwhile, India's merchandise exports jumped 23.52 percent year-on-year in June to $40.13 billion, while the trade deficit ballooned to a record $26.18 billion on the back of a 57.55 percent surge in imports, official data showed.

Benchmark indexes Sensex and the Nifty ended a choppy session down around 0.2 percent each on Thursday, extending losses for the fourth day running. The rupee slipped to a low of 79.92 before closing at 79.88 against the dollar.

Asian markets traded mixed this morning as China's Q2 GDP data missed expectations but retail sales topped estimates.

The dollar was on course to post its third weekly gain while Brent crude futures held below $100 a barrel on demand worries. Gold hovered around $1,700 per ounce after reaching a one-year low overnight.

U.S. stocks climbed well off their worst levels of the day on Thursday but still ended broadly lower, reflecting disappointing earnings news from financial giants JPMorgan Chase and Morgan Stanley.

A key measure of U.S. wholesale and business prices increased more than expected in June and new claims for unemployed benefits hit an eight-month high last week, adding to fears of a possible recession.

The Dow ended half a percent lower and the S&P 500 edged down 0.3 percent while the tech-heavy Nasdaq Composite finished on a flat note.

European stocks fell sharply on Thursday as the EU slashed its growth forecasts and predicted that inflation will be even steeper than feared.

The pan European Stoxx 600 fell 1.5 percent. The German DAX tumbled 1.9 percent, France's CAC 40 index gave up 1.4 percent and the U.K.'s FTSE 100 shed 1.6 percent.