Bullish start likely on global support
Indian shares are likely to see a strong start as the global cues look supportive with SGX Nifty trading 32 points higher.
Indian equity benchmarks are poised to witness a gap up opening on Friday with continued optimism over Asia’s third biggest economy bolstering the appetite for risky assets. Gains in the CNX Nifty Index Futures for June delivery which advanced by 0.35 per cent or 29 points at 8,263 at 10:32 AM Singapore time also signals that Dalal Street may open higher today.
The focus today will on the May Services PMI data which will offer further cues over the country’s economic outlook. In April, the Indian services gauge eased to 53.7 from 54.3 in March, signaling a softer pace of expansion. Caution ahead of the US jobs data which may dictate the timing of the next Fed interest rate hike may weigh on sentiment. The world’s biggest economy is tipped to have added a robust 160K jobs in May with the unemployment rate slipping to 4.9 per cent, analysts’ estimates showed. A bullish jobs report may bolster the case for the Fed to raise borrowing costs as early as June, a move which may cause capital outflows from emerging markets. Meanwhile, the OPEC shunned the idea of a production ceiling while the cartel was hopeful of a recovery in global oil prices.
The European Central Bank (ECB) refrained from fresh stimulus, while raising growth and inflation forecasts for the 19-member Euro area economy. Back home, the 30-share Sensex on Thursday rallied for a second straight day, jumping by 129.21 points or by 0.48 to end at 26,843.14 driven by Coal India which surged after raising coal prices.
Trend in FII flows: The FIIs were net buyers of Rs 851.85 Cr in the cash segment on Thursday while the DIIs were net sellers of Rs -576.86 Cr, as per the provisional figures.