Indian share markets may open higher on Thursday tracking global cues after US President Donald Trump outlined fiscal stimulus to spur growth in the world’ largest economy even as dollar rose to 7-week high on expectation that the Federal Reserve will hike interest rates in March policy review.
On Wednesday, Sensex finished 241 points or 0.8% higher at 28,984.49 after touching 29,000-level in intra-day trade while Nifty closed up 0.75% at 8,945.80 over optimism that the economy weathered the demonetisation impact to grow by 7% during October-December including Trump announced plans to cut taxes and spend $1 trillion to upgrade infrastructure.
After the US benchmark Dow Jones Industrial Average touched an all-time high of 21,000 on Wednesday, Asian shares opened up tracking Wall Street, which rose on expectation of economic recovery that will prompt a Fed rate hike this month. The expectation of rate hike lifted the dollar.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.2%. Japan’s Nikkei was up 1.3% to a 14-month high while Hang Seng gained 1% and Kospi 0.8% in early trade.
The dollar hit seven-week high on signals from Fed officials of a hike in interest rates. The dollar index, which measures the greenback against a basket of six major currencies, touched 101.87 after hitting 101.97 on Wednesday, the highest since January 11.
On Wednesday, Federal Reserve Governor Lael Brainard said an improving global economy and a solid US recovery mean it will be “appropriate soon” for the Fed to raise rates. On Tuesday, two other Fed officials William Dudley and John Williams indicated they are worried about waiting too long in the face of pending economic stimulus from Trump.