Indian shares may open lower on fresh Mideast escalation, US inflation
- GIFT Nifty futures were trading at 23,069
Indian shares are expected to open lower due to escalating Middle East conflict driving up oil prices and accelerating US inflation, making emerging markets less attractive for foreign investors.
- Escalating Middle East conflict and rising global oil prices.
- Accelerating US inflation and its impact on Federal Reserve policy.
- Significant foreign investor outflows from Indian equity markets.
Indian shares are likely to open lower on Thursday, as a fresh escalation in the Middle East conflict and a sharp jump in US inflation readings have triggered a risk-off sentiment across global equities.
The United States launched new strikes against multiple targets in Iran, the US military said on Wednesday, as President Donald Trump vowed even more attacks if no peace deal is secured.
The escalation pushed Brent crude futures up 1.1% to $94 per barrel, while Asian stocks dropped 0.4%.
GIFT Nifty futures were trading at 23,069 as of 7:43 a.m. IST, indicating that the benchmark Nifty 50 would open below Wednesday’s close of 23,214.95.
The Iran war, now in its fourth month, has raised energy prices and triggered concerns over its impact on growth and inflation in India, the world’s third-largest oil importer.
Data released overnight showed that U.S. consumer inflation increased at its fastest pace in three years in May, boosted by surging energy prices amid the Middle East conflict, giving the Federal Reserve more ammunition to keep interest rates unchanged into 2027.
Higher interest rates in the U.S. tend to make emerging market equities less attractive for foreign portfolio investors (FPIs).
FPIs sold Indian shares worth 21.25 billion rupees ($223.06 million) on Wednesday, marking a ninth straight session of outflows. They have offloaded a record $30.4 billion worth of shares in India so far this year.
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