Indian shares set to rise on strong domestic growth, in-line US inflation data

Indian markets are anticipated to begin higher on Friday, buoyed by faster-than-expected domestic economic growth and in-line US inflation figures.

Indian shares are set to open higher on Friday, as faster-than-expected domestic economic growth and in-line U.S. inflation data boosted sentiment.

India’s GIFT Nifty was trading at 22,210 as of 8:04 a.m. IST, indicating that the NSE Nifty 50 will open above its Thursday close of 21,982.80.

Both the Nifty and BSE Sensex are on track for weekly declines, having shed about 1% so far after two weeks of gains.

Indian economy grew 8.4% in the October-December quarter, the fastest pace in six quarters and also above estimates, aided by robust manufacturing and construction activity, data showed post-market hours on Thursday.

”The gross domestic product (GDP) growth data was influenced by higher net taxes,” said analysts at Barclays in a note, while adding that ”underlying growth momentum remains intact.”

Barclays forecasted a Reserve Bank of India rate cut in the third quarter of calendar 2024.

India’s strong macroeconomic fundamentals, coupled with sustained domestic inflows and steady corporate earnings have been key drivers of the ongoing stock market rally.

The benchmark Nifty 50 is up 1.2% in 2024 so far, after rising 20% last year. It has hit record highs in ten sessions in the year, although bouts of profit booking have emerged near record-high levels.

Wall Street equities closed higher overnight, with S&P 500 and Nasdaq Composite settling at record highs after in-line U.S. inflation reading kept intact the likelihood of a June interest rate cut.

Asian markets were muted at the open on weak economic data from China.

Foreign investors net bought shares worth 35.68 billion rupees (~ $430 million) on Thursday, while domestic institutional investors sold shares worth 2.30 billion rupees.