Indian stock markets are likely to open higher on Friday, following positive global cues and strong corporate earnings. The Nifty futures on the Singapore Exchange (SGX) traded 0.4% higher at 21,250, indicating a gap-up start for the domestic benchmark indices.
The sentiment was boosted by the record closing of the US stocks on Thursday, as the investors cheered the robust retail sales data and the European Central Bank’s (ECB) decision to keep the interest rates unchanged. The Dow Jones Industrial Average rose 0.9% to 36,157, the S&P 500 gained 0.8% to 4,537, and the Nasdaq Composite added 0.5% to 15,021. The US retail sales rose 0.7% in September, beating the expectations of a 0.2% decline, and suggesting that consumer spending remained resilient despite the supply chain disruptions and inflation pressures. The ECB, meanwhile, maintained its ultra-loose monetary policy stance, and said that it would start reducing its pandemic emergency bond purchases in the next quarter, but did not provide any clear timeline or amount.
The Asian markets also traded higher on Friday, tracking the Wall Street gains and the easing of the energy crisis in China. Japan’s Nikkei 225 rose 1.6% to 29,665, China’s Shanghai Composite advanced 0.6% to 3,583, and Hong Kong’s Hang Seng Index climbed 0.8% to 25,892. The oil prices eased after China released some of its strategic reserves to ease the supply crunch and lower the fuel costs. The Brent crude futures fell 0.6% to $84.5 per barrel, while the WTI crude futures dropped 0.7% to $81.9 per barrel.
On the domestic front, investors will focus on the second-quarter earnings season, which has been largely positive so far. On Thursday, Reliance Industries, HDFC Bank, HCL Technologies, and Bajaj Finance reported better-than-expected results, boosting their share prices. Reliance Industries posted a 43% jump in its consolidated net profit to ₹13,680 crore, driven by its digital services and retail segments. HDFC Bank reported an 18% rise in its net profit to ₹8,834 crore, as its asset quality improved and its provisions declined. HCL Technologies posted a 9.5% increase in its net profit to ₹3,265 crore, as its revenue grew across all its business segments and geographies. Bajaj Finance reported a 36% surge in its net profit to ₹1,471 crore, as its assets under management and new loans grew.
Some of the key companies that will announce their quarterly results on Friday are Infosys, ICICI Bank, Wipro, and Tata Consultancy Services. The market will also keep an eye on the macroeconomic data, such as the wholesale price index (WPI) inflation and the foreign exchange reserves, which will be released later in the day. The WPI inflation is expected to remain high in September, due to the rising commodity prices and supply chain issues. The foreign exchange reserves, which hit a record high of $642.5 billion in the week ended October 1, are expected to increase further, as the central bank intervenes to curb the rupee appreciation.
The market will also monitor geopolitical developments, such as the Israel-Hamas conflict, the US-China tensions, and the COVID-19 situation, which may have an impact on the risk appetite and the fund flows.
