Indian shares poised for sharp fall as Brent crude surges to $108

Indian shares are headed for a sharp decline at Friday's open after Brent crude climbed to $108 a barrel, as an expanding Middle East conflict pushed investors away from risk assets.

The trigger was a fresh escalation in the region: Iran-aligned Houthis took control of Yemen's port city of Mocha on Thursday and moved along the Red Sea coast toward strategic islands, according to military sources. The advance came hours after U.S. President Donald Trump said he expected the Iran war to conclude after the U.S. midterm elections.

The Houthi push endangers shipping through the Red Sea, a key global waterway, even as traffic through the Strait of Hormuz remains constrained by intensified tanker attacks.

GIFT Nifty futures stood at 23,346 points as of 7:18 a.m. IST, signalling a negative start for the Nifty 50 index, which ended Thursday at 23,477.8. The Nifty and Sensex have lost 1.8% and 2.1% this week and are on course for a fifth consecutive weekly decline.

A heavy IPO calendar has added to the pressure, with large offerings from the National Stock Exchange of India and a potential issue from billionaire Mukesh Ambani-backed Jio Platforms weighing on sentiment.

Surging oil prices have heightened inflation risks and driven global bond yields to fresh highs, while dragging on equities. MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.8%.

India is especially exposed to costlier crude because it imports the bulk of its energy needs. "The sharp increase in crude prices is likely to heighten concerns over India's import bill, inflation and corporate margins, keeping risk appetite subdued," said Ponmudi R, CEO of stock broker Enrich Money.

Foreign investors net sold Indian shares worth 4.38 billion rupees ($45.89 million) on Thursday on a provisional basis, and have offloaded $1.36 billion of shares so far in September.

Among stocks in focus, information technology shares will draw attention after the U.S. proposed scrapping a 60-day grace period that lets certain immigrants, including skilled workers on H-1B visas, remain in the country and find a new sponsor after losing a job. General Insurance Corporation, New India Assurance and other NSE-linked companies will also be watched as India's largest exchange prepares to launch its IPO on September 17 at a price band of 1,700-1,785 rupees per share. HDFC Bank secured favourable orders from Bahrain's High Civil Court in two proceedings brought by investors who had purchased Additional Tier 1 bonds issued by Credit Suisse, after the court reviewed the claims and evidence, according to multiple media reports.