Indian Shares Poised for Higher Open as Fed Rate Hike Expectations Ease

Indian shares are expected to open higher on Friday after four consecutive sessions of losses. The improved sentiment comes as expectations for a US Federal Reserve interest rate hike later this month have decreased, lifting global equities and weighing on bond yields.

Fed Governor Christopher Waller said that he would support keeping interest rates unchanged at the Fed's next policy meeting if upcoming data confirms easing inflation pressures. This has led to a reduction in expectations for a rate increase at the Fed's mid-September meeting, with CME FedWatch now showing about 50% probability compared to around 63% previously.

The Nifty 50 index and BSE Sensex have both declined by over 1% this week, with concerns over volatility linked to the new stock closing auction mechanism and strong primary market activity weighing on sentiment. Brent crude futures hovered around $96 per barrel as investors balanced risks from escalating Middle East tensions against hopes for a Russia-Ukraine peace deal.