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Indian shares are set for a muted start on Wednesday as softer-than-expected U.S. inflation data helped offset concerns over escalating U.S.-Iran tensions, with the two countries exchanging strikes and battling for control of the Strait of Hormuz.

GIFT Nifty futures were trading at 24,042, as of 7:58 a.m. IST, indicating the Nifty 50 could open near 24,052.05, the closing level on Tuesday.

Brent crude climbed 1.2% to $85.8 a barrel, after U.S. President Donald Trump reimposed a naval blockade on Iranian ports and Tehran retaliated with strikes on U.S. infrastructure in the Middle East.

Higher oil prices threaten to widen India's import bill and fiscal deficit, stoke inflation and squeeze corporate margins, given the country's heavy dependence on imported energy. [MKTS/GLOB]

However, softer-than-expected U.S. inflation in May lifted Wall Street and Asian equities, cushioning risk sentiment.

Lower U.S. inflation supports emerging markets such as India by keeping near-term rate-hike risks at bay, easing dollar pressure and encouraging foreign flows into risk assets. [O/R]

Both Nifty 50 and Sensex fell 0.7% each on Tuesday, snapping a three-session winning streak, with investors assessing the June-quarter corporate earnings.

"We expect Nifty to extend the recent consolidation in the range of 23,800 to 24,350," said Bajaj Broking Market, adding that higher crude prices is weighing on risk appetite.

Foreign institutional investors (FII) were net sellers of Indian stocks on Tuesday, with outflows at 7.40 billion rupees. Domestic institutional investors (DII) purchased stocks worth 29.28 billion rupees, according to NSE's provisional data.

Among stocks, L&T Technology Services will be in focus after the engineering research and development firm posted an 11.5% rise in its quarterly consolidated revenue.

Peer Tata Elxsi could rise after the company reported an 18.2% rise in first-quarter profit, supported by strong tech spending from global operators, broadcasters and device manufacturers.

STOCKS TO WATCH

** Wipro and Infosys are in focus as U.S.-listed shares of both companies dropped overnight, after bellwether IBM posted weaker quarterly earnings

** Anand Rathi Share posts a marginal 2.35% rise in June-quarter profit ** Signatureglobal says it posted a 25% sequential growth in pre-sales in the June quarter to 19.7 billion rupees ($204.78 million)

** IOL Chemicals and Pharmaceuticals gets approval from China's drug regulator for a key raw material used to manufacture cardiovascular medications

** Kirloskar Brothers says unit secures an 11.7-million-pound ($15.68 million) order from Saipem Offshore Construction SpA for vertical pumps and spares; order to be executed over 52-60 weeks

($1 = 0.7463 pounds)

($1 = 96.2000 Indian rupees)