Indian Shares Set To Follow Global Peers Higher

Indian shares look set to open higher on Thursday as a rebound in U.S. tech shares on the back of upbeat economic data helped ease AI-disruption fears.

Traders will keep a close eye on the latest geopolitical developments and oil price movements amid worries that the U.S. may take military action against Iran.

Benchmark indexes Sensex and Nifty ended a choppy session slightly higher on Wednesday despite heavy selling in IT stocks on fears that global companies might spend less on traditional IT services and outsourcing in the future.

The rupee rose 5 paise to close at 90.67 against the U.S. dollar, driven by inflow of foreign funds.

Foreign investors net bought shares worth Rs 1154 crore on Wednesday while domestic institutional investors net bought shares to the extent of Rs 440 crore, according to provisional exchange data.

Asian markets followed Wall Street higher, with China, Hong Kong and Taiwan closed for the Lunar New Year holidays while South Korea’s Kospi average surged to a record, led by heavyweight semiconductor names.

The dollar held gains on hawkish Fed signals and ahead of Friday’s inflation report. Gold prices were marginally lower after a more than 2 percent gain in the previous session.

Oil prices held gains after their biggest rise since October following reports that American military intervention in Iran may come sooner than expected.

CBS News reported citing top national security officials that the U.S. military is ready for potential strikes on Iran as soon as Saturday, but the timeline for any action is likely to extend beyond this weekend.

Axios reported that a potential U.S. military operation against Iran would likely be a “massive, weeks-long campaign” and that Israel is pushing for a scenario targeting regime change in the Islamic Republic.

West Texas Intermediate crude futures traded above $65 a barrel after surging 4.6 percent on Wednesday. Brent crude contracts were modestly higher after closing above $70 for the first time in more than two weeks.

Overnight, U.S. stocks closed higher even as the Federal Reserve’s January meeting minutes showed officials remain divided about the outlook for interest rates, with many members cautioning that disinflation may be slow and uneven.

In economic releases, industrial production growth for January exceeded market expectations while new orders for manufactured durable goods declined less than expected in December and housing starts hit a five-month high, separate reports revealed.

Tech shares led the surge following Meta’s announcement that it will deploy millions of Nvidia chips in its data center buildout.

The tech-heavy Nasdaq Composite climbed 0.8 percent, the S&P 500 rose 0.6 percent and the Dow inched up 0.3 percent.

European stocks closed on a firm note on Wednesday after the release of soft inflation data from both France and the U.K. and reports of a leadership change at the European Central Bank.

The pan European Stoxx 600 advanced 1.2 percent. The German DAX rallied 1.1 percent, France’s CAC 40 added 0.8 percent and the U.K.’s FTSE 100 surged 1.2 percent.