Indian shares set for muted start as US rate relief meets Middle East caution
Indian shares were on track for a subdued start on Thursday, as easing concerns over a U.S. rate hike after the latest inflation reading were offset by stalled Middle East peace efforts.
Stock-specific moves are likely to be in focus following MSCI's index rebalancing announcement and amid the ongoing quarterly earnings season.
GIFT Nifty futures were at 24,446 points as of 7:18 a.m. IST, indicating a muted start for the Nifty 50, which closed at 24,435.95 on Tuesday.
U.S. consumer prices barely increased in July, further reducing the likelihood of a Federal Reserve interest rate hike next month after soft jobs data released last week.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1%, led by a 4.4% jump in South Korean shares following the inflation data. [MKTS/DATA]
Lower interest rates in the U.S. can push Treasury yield and dollar lower, making emerging market equities such as India attractive for foreign investors.
India's retail inflation data, released after market hours on Wednesday, showed consumer prices accelerated in July to 4.45%, but is still unlikely to push the central bank to hike interest rates over the next few months.
Oil prices fell 1% on Thursday as forecasters lowered global oil demand projections for 2026 because of the disruptions from the U.S.-Israeli war on Iran, though the supply constraints from the conflict provided a floor for the market. [O/R]
Iran and the U.S. remained at loggerheads over efforts to agree a permanent end to the war in the Gulf, Reuters reported on Thursday, citing a senior Iranian source, who said there had been no progress in talks to revive the interim deal agreed in June.
'Although Brent crude has eased modestly to below $89 per barrel, the unresolved situation in the Strait of Hormuz continues to keep the geopolitical risk premium in energy markets elevated," said Hariselvan Radhakrishnan, founder and CEO of HST Wealth.
Meanwhile, MSCI will add Laurus Labs, Lenskart, Adani Energy Solutions, and Groww to its flagship index, as part of a periodic review.
STOCKS TO WATCH
** Bank of America will acquire as much as a 49.9% stake in the non-bank lending arm of Jio Financial Services in a 182.68-billion-rupee ($1.92 billion) deal.
** Apollo Hospitals Enterprise posts a 34% rise in quarterly profit, as strong demand for complex treatments supported growth in its core healthcare services business.
** Tata Motors reports higher profit for first quarter and says it expects demand to stay firm in the coming quarters, supported by higher-payload trucks, electric vehicles and a strong government order book.
