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 Indian shares are set to open higher on Friday, as global central banks hinted at inflation easing, spurring optimism that the rate hike cycle may be near an end, while the ongoing rout in Adani group stock could cap gains.

India's NSE stock futures listed on the Singapore exchange were up 0.40% at 17,710 as of 8:05 a.m. IST.

After the U.S. Federal Reserve acknowledged in its monetary policy decision on Wednesday that the disinflationary process may have begun, the European Central Bank and the Bank of England followed suit on Thursday.

The two central banks hiked the key interest rate by 50 basis points (bps) each and signalled that the tide was turning against inflation.

U.S. and European equities rose on Thursday. Asian markets fell, with the MSCI's broadest index of Asia-Pacific shares outside Japan shedding 0.74%.

The Reserve Bank of India is expected to raise the key policy repo rate by 25 bps at its next policy decision on Feb. 8, beginning the end of the tightening cycle.

Capping the gains in domestic equities could be the ongoing selloff in Adani group stocks, which has caused a rout of over $100 billion in market capitalisation after the Hindenburg report on Jan. 24.

Analysts said that the selloff in Adani stocks has created panic in Indian markets.

Foreign institutional investors sold 30.64 bln rupees ($373.23 million) worth of shares on a net basis on Thursday while domestic institutional investors purchased 23.71 bln rupees worth of shares, official data showed.

STOCKS TO WATCH

Adani Enterprises, Adani Ports, Ambuja Cements: The National Stock Exchange puts companies under additional surveillance measure (ASM) framework after the recent selloff.

Adani Ports: Co handled 27.6 million metric tonnes of total cargo in January, up 11% YoY.

Tata Consumer: Co reports better-than-expected consolidated net profit in Q3 on price hikes, brand sales.

HDFC AMC: Co gets market regulator's approval permitting investor abrdn to cut stake to less than 10%.

($1 = 82.0940 Indian rupees)