Indian Shares Set for Muted Open as Oil Rally Deepens on Mideast Strife
Indian equities likely to open flat as Brent crude jumps toward $100 on escalating Middle East conflict, stoking inflation concerns.
Indian stock markets are expected to open on a subdued note on Wednesday, with sentiment weighed down by escalating hostilities in the Middle East and a corresponding surge in global crude oil prices.
Brent crude futures climbed 1.5% to $99.5 per barrel after a series of attacks intensified the regional conflict. The escalation included strikes by Iranian-backed Houthi forces on Saudi cities, a U.S. military response against Iranian oil tankers, and an Iranian attack on a U.S. base in Jordan.
For India, which imports the bulk of its energy requirements, a sustained rise in oil prices poses a triple threat: a wider trade deficit, higher imported inflation, and slower economic growth. These concerns have kept risk appetite in check.
GIFT Nifty futures, an early indicator of market direction, were at 23,652.5 points as of 7:46 a.m. IST, pointing to a flat start for the Nifty 50 index, which closed at 23,635.1 on Tuesday. Over the past seven sessions, both the Nifty and the BSE Sensex have shed 2.2% each, closing lower in six of those sessions. Tuesday's close marked their weakest level since June 12.
Globally, investors are now awaiting U.S. inflation data due later this week, which is expected to shape the Federal Reserve's interest rate decision next week. Higher U.S. rates tend to draw capital away from emerging markets like India, as dollar-denominated assets and Treasuries become more attractive.
Foreign investors have been net sellers of Indian equities, offloading shares worth 1.23 billion rupees ($12.97 million) on Tuesday. Provisional data shows cumulative foreign outflows for September have reached $1.33 billion.
In corporate news, Biocon is in focus amid media reports that Active Pine may sell a stake via a block deal valued at 6.38 billion rupees. Separately, IT services firm Coforge announced the resignation of Chairman Om Prakash Bhatt, following an internal audit into board evaluation that flagged concerns over incomplete disclosure of material information regarding his own performance.