Indian shares set to open lower as Mideast conflict drives oil surge
Indian shares are set to open lower on Wednesday, as escalating U.S.-Israel clashes with Iran lifted oil to a 19-month high, disrupted Middle East energy shipments and stoked fears of a prolonged conflict, intensifying risk aversion.
The Gift Nifty futures were trading at 24,442.5 points as of 7:52 a.m. IST, indicating that the benchmark Nifty 50 will open below Monday's close of 24,865.7.
Domestic markets were closed on Tuesday for a local holiday.
Other Asian markets slid 3.1%, while Wall Street closed lower overnight on worries that a wider Mideast war could deliver an energy shock that raises inflation and delays rate cuts. [MKTS/GLOB]
U.S. and Israeli forces have struck Iran for a fourth straight day, while Iranian drones and missiles have hit Gulf oil refineries and targeted U.S. embassies in Saudi Arabia and Kuwait.
Brent crude futures rose to $82.77 per barrel, the highest since July 2024, and have gained nearly 17% in four sessions. Higher oil prices and trade disruptions weigh on large importers of the commodity such as India. [O/R]
"Investor sentiment has deteriorated sharply after escalating tensions in the Middle East triggered a surge in crude oil prices and heightened global uncertainty," said Ajit Mishra, senior vice president of research at Religare Broking.
"The rise in oil (prices) has raised concerns about inflation, currency pressure and India's import bill, which is also weighing on equities."
The Middle East supplies about half of India's crude imports, accounts for roughly 40% of remittances and is the destination for about 17% of the country's exports.
Indian benchmarks, the Nifty and the BSE Sensex, have lost about 2.5% each over the past two sessions. [.BO]
Foreign portfolio investors offloaded stocks worth 32.96 billion rupees ($357.8 million) on Monday, while domestic institutional investors purchased stocks worth 85.94 billion rupees, per the NSE's provisional data.
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($1 = 92.1160 Indian rupees)
