Indian equity benchmarks set for muted start; weak rupee, rising oil prices weigh

India’s equity benchmarks are likely to open little changed on Friday as optimism over upbeat commentary on the economy in the government’s economic survey is offset by a weak rupee, persistent foreign fund outflows and higher oil prices.

Gift Nifty futures were trading at 25,405 points as of 7:51 a.m. IST, indicating the benchmark Nifty 50 index will open near Thursday’s close of 25,418.9.

The economic survey projected India’s economy to grow between 6.8% and 7.2% in the fiscal year starting April on the back of strong domestic demand.

Investors now await the federal budget scheduled to be tabled in the parliament by the country’s Finance Minister Nirmala Sitharaman on Sunday. Markets will operate in a special Sunday session.

The 50-stock index has risen 1.5% in three sessions this week, supported by a landmark trade deal between India and the European Union.

Meanwhile, crude oil prices surged to a five-month high on Thursday on rising concerns that global supplies could be disrupted if the U.S. attacks Iran, one of OPEC’s biggest crude producers.

Higher oil prices are detrimental for countries like India, that import most of their requirement, as they risk stoking higher fiscal deficits, currency weakness and increased costs for companies.

The rupee touched a new record low against the U.S. dollar this week.

Foreign investors offloaded Indian shares worth 3.94 billion rupees ($42.88 million) on Thursday, provisional data showed. They have sold about $4 billion worth of Indian equities in January.