Indian shares set to open lower as hot US inflation raises rate worries

Indian shares are set to open lower on Thursday, tracking Asian peers as a quicker-than-expected increase in US consumer price inflation raised expectations of another rate hike by the Federal Reserve this year.

Higher US rates make emerging markets such as India less attractive for overseas investors, who have already sold Indian stocks for 14 straight sessions into Wednesday, taking year-to-date outflows to a record $32.7 billion.

GIFT Nifty futures were at 22,606.5 at 7:52 a.m. IST, indicating a negative start for the benchmark Nifty 50, which closed at 22,622.7 on Wednesday.

Hotter-than-expected US inflation reinforces concerns over tighter global monetary conditions, a sentimental negative for risk assets such as emerging market equities, two traders said.

Brent crude traded around $104.5 a barrel, as investors weighed supply risks from attacks on shipping through the Strait of Hormuz against US efforts to cut petroleum shipping costs by easing sanctions on vessels. [O/R]

Domestic investor attention is likely to remain focused on company earnings, with Wipro scheduled to report its second-quarter results later in the day.

Following HCL Tech's better-than-expected earnings earlier this week, which sparked a rally in technology stocks, markets will closely scrutinize Wipro's outlook for discretionary technology spending, deal conversions and margins.

Robust primary-market activity could continue to divert liquidity from the secondary market, potentially limiting near-term upside for stocks, two traders said.

Jio Platforms on Wednesday announced plans to raise up to $3.2 billion in what would be India's largest initial public offering to date.

The IPO would value the Mukesh Ambani-founded group at about $108.3 billion, with a price band of 1,065 rupees to 1,119 Indian rupees ($11.19 to $11.76) per share.

STOCKS TO WATCH

** Canada's Fairfax Financial Holdings will buy a majority stake in IDBI Bank in a deal worth 528.78 billion rupees ($5.56 billion), says the Indian government

** HDB Financial Services posts quarterly profit rise on loan demand, lower provisions

** Tata Technologies reports marginal uptick in second-quarter profit, projects double-digit revenue growth for the financial year

** ICICI Lombard posts higher profit in the second quarter as tax breaks lift motor, health insurance demand

** CEAT logs a decline in the September quarter profit on higher rubber prices due to supply shortages and adverse weather in key producing countries

($1 = 95.1500 Indian rupees)

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Ronojoy Mazumdar)