Indian shares set to open higher after Fed hikes rate, leaves door open

BENGALURU, July 27 (Reuters) - Indian shares are set to open marginally higher on Thursday after the U.S. Federal Reserve hiked rates by 25 basis points as expected and reiterated its data-dependent approach to further policy tightening.

Indias GIFT Nifty on the NSE International Exchange was up 0.10% at 20,004 as of 8:12 a.m. IST.

Wall Street equities ended little changed overnight after the Fed stuck to the script while delivering its 11th consecutive rate hike. The hike took the benchmark interest rate to 5.25-5.50%, the highest level since the global financial crisis in 2007-2009.

Fed Chair Jerome Powell also said the central bank is \“no longer forecasting\” a recession while cautioning that economic data would determine the extent of additional policy firming to bring inflation down to the 2% target. Asian markets edged higher after the Fed decision.

\“While Fed hinted at further hikes if core inflation does not come below 2% soon, it could still skip the hike in the next meeting and do it in the one after if core inflation is still not in the mandated zone,\” said Vikas Gupta, CEO of Mumbai-headquartered global investment management firm OmniScience Capital.

Both the Nifty 50 (.NSEI) and Sensex (.BSESN) advanced on Wednesday, led by gains in heavyweights Reliance Industries (RELI.NS) on report of Qatar Sovereign funds interest in its retail arm and Larsen & Toubro (LART.NS) on strong earnings.

Foreign institutional investors bought 9.23 billion rupees ($112.6 million) of Indian equities on a net basis on Wednesday, while domestic investors purchased 4.70 billion rupees of shares, as per provisional NSE data.

STOCKS TO WATCH:

** Reliance Industries (RELI.NS): Companys unit Jio Financial Services (JIOF.NS) and U.S. based BlackRock to form an equal joint venture to launch asset management services in India.

** Axis Bank (AXBK.NS): Private lender misses June-quarter profit view as loan-loss provisions jump.

** Dr Reddys Laboratories (REDY.NS): Drug maker beats first quarter profit view on strong sales in North America and Russia.

** Tech Mahindra (TEML.NS): Software firm posts 39% slump in June-quarter profit as clients cut spending.

** Key earnings on Thursday: Nestle India (NEST.NS), Bajaj Finserv (BJFS.NS), ACC (ACC.NS).

($1 = 81.9500 Indian rupees)

Reporting by Bharath Rajeswaran in Bengaluru; Editing by Dhanya Ann Thoppil

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