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Indian shares are set for a muted start on Friday, after logging their best day in over two weeks in the last session, as a global rally on hopes of U.S. interest rate cuts cooled down.

The Gift Nifty was trading at 22,480 as of 8:11 a.m. IST, indicating that the Nifty 50 will open near Thursday's close of 22,403.85.

All the three major Wall street indexes closed lower overnight, with the Dow Jones industrial average and Nasdaq Composite reversing course after logging fresh record highs in intraday trade.

The drop came after data showed a fall in weekly jobless claims, indicating a tight labour market while a rise in U.S. import prices signalled persistent price pressures.

The data dampened hopes of early rate cuts on cooler-than-expected inflation data for April.

Asian markets were off to a subdued start, on the day.

India's benchmark indexes gained about 0.9% each on Thursday, their best session since April 29, while volatility hovered around 19-month levels on sustained foreign selling and concerns over the outcome of national elections.

"Concerns regarding consistent FII selling, India VIX still above 20 levels, ongoing general election polling and the outcome could keep volatility higher," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

Foreign portfolio investors (FPIs) have offloaded shares worth 276.19 billion rupees ($3.31 billion) in May so far, highest in 16 months since January 2023.

The Nifty 50 has gained 1.58% this week, set to be its best week since early February.

STOCKS TO WATCH

** Biocon - Indian biopharmaceutical company reported a decline in its fourth-quarter profit on higher raw material costs.

** Vodafone Idea - India's third-largest telecom operator by subscribers, missed analysts' estimates for quarterly revenue on shrinking user base.

** Container Corp of India - State-run co posted a higher fourth-quarter profit on Thursday, helped by growing volumes in its mainstay export/import segment.