Domestic shares were likely to open marginally higher on Thursday, after rising the most in more than three years in the previous session, as Prime Minister Narendra Modi was set to come back to power for a third term.

The Gift Nifty was trading at 22,677.00 as of 7:59 a.m. IST, indicating that the benchmark Nifty 50 will open marginally higher than its Wednesday close of 22,620.35.

The National Democratic Alliance on Wednesday formally named Modi to lead the government. Unexpected election results have meant that Modi's Bharatiya Janata Party needs to rely on alliance partners to stay in power.

NSE Nifty 50 and S&P Sensex closed over 3 per cent higher on Wednesday after slipping nearly 6 per cent on Tuesday.

The National Stock Exchange of India handled the highest ever number of transactions in a single trading day on Wednesday, with 19.71 billion orders and 285.5 million transactions.

Foreign institutional investors (FII) net sold ₹5,656 crore ($678.2 million) worth of Indian shares on Wednesday, provisional data from the NSE showed.

"Attention will remain on the formation of the government and the forthcoming Reserve Bank of India policy meeting," Vinod Nair, head of research at Geojit Financial Services said.

India's monetary policy decision and the closely watched US non-farm payrolls report are both due on Friday.

On Thursday, consumer and auto stocks will be in focus after several brokerages preferred them over capital goods, state-run companies, industrials and utilities on expectations that some of the reforms in these sectors will likely be delayed.

Stocks to watch

Rail Vikas Nigam: State-owned rail infrastructure developer gets letter of acceptance from Eastern railway for a project cost at ₹391 crore.

Bharat Heavy Electricals: Power and industrial equipment maker gets thermal power project orders, including one from Adani Power.

($1 = 83.3940 Indian rupees)

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