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

According to the latest news reports, Indian shares are expected to begin trading lower on Friday, April 11, 2023, due to the erosion of expectations for early Federal Reserve (Fed) rate cuts following the release of hotter-than-expected U.S. inflation data. The Consumer Price Index (CPI) in the United States rose by 0.4% in March, exceeding market expectations and marking the largest monthly increase since June 2008. This unexpected surge in inflation has led investors to reconsider their bets on imminent Fed rate cuts.

Moreover, attention is shifting towards the upcoming domestic earnings reporting season in India, with Tata Consultancy Services (TCS), the country's largest software services exporter, scheduled to release its quarterly results later in the day. TCS is expected to announce its financial performance for the fourth quarter ended March 31, 2023. The company's earnings report will provide valuable insights into the health and resilience of India's IT sector amidst the ongoing economic uncertainty and geopolitical tensions.

The S&P BSE Sensex and the Nifty 50 indices in India had already experienced a decline in their previous trading sessions due to profit-booking and selling pressure from foreign investors. The Sensex closed at 58,858.35 points on Thursday, April 10, 2023, down by 0.6%, while the Nifty 50 ended at 17,446.55 points, down by 0.5%.

The broader Nifty Midcap and Smallcap indices also experienced losses, with the Nifty Midcap 100 index closing 0.8% lower and the Nifty Smallcap 100 index finishing 1.1% down. The rupee was trading at 74.85 against the U.S. dollar, a marginal appreciation from its previous close of 74.87.

In other news, the Reserve Bank of India (RBI) is scheduled to announce its monetary policy decision on April 13, 2023. The RBI is expected to maintain its repo rate at 4.2%, but investors will be closely watching for any changes in the central bank's stance towards interest rates and its assessment of the economic situation in India.

Meanwhile, global markets were mixed on Thursday, with Wall Street's major indices closing in positive territory despite the U.S. inflation data. The Dow Jones Industrial Average gained 0.3%, the S&P 500 added 0.2%, and the Nasdaq Composite rose by 0.4%. European markets, however, ended in the red, with the Euro Stoxx 600 index shedding 0.3%. Asian markets followed suit, with Japan's Nikkei 225 and South Korea's Kospi both declining by 0.6%.

In summary, Indian shares are expected to open lower on Friday due to the erosion of rate cut expectations following U.S. inflation data and the upcoming domestic earnings reporting season. TCS is set to report its quarterly results later in the day, providing insights into the health of India's IT sector. The RBI's monetary policy decision is scheduled for April 13, 2023. Global markets were mixed in their previous trading sessions, with Wall Street's major indices closing in positive territory despite the U.S. inflation data and European and Asian markets ending in the red.