INDIA STOCKS-Indian shares set to open lower on fading US rate cut hopes

Indian stocks were poised to begin trading lower on Friday, April 11, 2023, following a disappointing U.S. jobs report and rising inflation figures that dampened expectations for early interest rate cuts by the Federal Reserve (Fed). The U.S. Labor Department reported that nonfarm payrolls increased by 200,000 in March, which was below market expectations, while average hourly earnings rose by 0.4%, marking the largest annual increase since 2001.

The Fed had previously signaled that it would consider raising interest rates if the labor market continued to tighten, which could lead to higher borrowing costs for companies and potentially dampen corporate earnings growth. The unexpectedly strong labor market data and wage growth, therefore, increased the likelihood that the Fed would raise rates sooner rather than later, which weighed on investor sentiment and negatively impacted global stock markets, including India's.

Meanwhile, the focus in India shifted to the upcoming earnings season, with Tata Consultancy Services (TCS), the country's largest software services exporter, scheduled to report its quarterly earnings later in the day. TCS is expected to announce its results after the market closes, and investors will be closely watching the company's revenue and profit growth figures, as well as its guidance for the rest of the fiscal year, to gauge the health of the IT sector and the broader economy.

As of 8:22 a.m. India Standard Time (IST), India's benchmark Nifty 50 index was indicated to open 0.3% lower at 22,679, based on the futures market, while the BSE Sensex was expected to decline by a similar margin. The Nifty Midcap and Smallcap indices were also expected to open in the red, indicating that the selling pressure was not limited to large-cap stocks.

The broader market sentiment was further dampened by concerns over rising crude oil prices, which hit a three-year high earlier in the week, and geopolitical tensions, particularly between Russia and Ukraine, which could lead to supply disruptions and higher energy prices. These factors combined could put pressure on corporate earnings and profitability, potentially leading to further selling in the Indian stock market.

In summary, Indian stocks were set to begin trading lower on Friday, April 11, 2023, due to the fading hopes for early Fed rate cuts, the upcoming earnings season, and broader market concerns over rising inflation, crude oil prices, and geopolitical tensions. TCS, India's largest software services exporter, was scheduled to report its quarterly earnings later in the day, and its performance would be closely watched for indications of the health of the IT sector and the broader economy.