Indian shares likely to open muted as US rate hike bets offset oil relief

Indian shares are likely to open little changed on Wednesday, as a fall in crude prices amid U.S.-Iran peace negotiations is tempered by growing expectations of tighter Federal ​Reserve policy.

GIFT Nifty futures were at 23,861.50 as of 7:58 a.m. IST, indicating ‌the Nifty 50 could open near the close of 23,824.10 points on Tuesday, when Indian blue-chips fell about 1.2%, dragged by heavyweight IT and metal stocks.

Shares had gained more than 4% in the previous seven sessions ​through Monday, as the Middle East peace talks pushed down crude oil prices, ​improving the growth and inflation outlook for the world’s No. 3 oil ⁠importer and consumer.

Wall Street equities fell overnight as a broad selloff in technology and semiconductor ​shares, profit-taking after a prolonged rally, and expectations of a more hawkish Fed weighed.

Asian markets rose ​0.4% after losing about 3.8% in the previous session.

Higher U.S. interest rates dent the relative appeal of emerging markets such as India for foreign investors and could cloud the growth outlook in the world’s largest ​economy, weighing on sectors exposed to the United States.

Brent crude futures fell 0.5%, trading near ​four-month lows, on signs that more oil tankers stranded in the Gulf since the start of the Iran ‌war ⁠are set to move out of the Strait of Hormuz.

Foreign portfolio investors net bought Indian shares worth 178.6 million rupees ($1.9 million) on Tuesday, while domestic institutional investors purchased stocks worth 6.80 billion rupees.

Lower crude prices, along with measures to stabilise the rupee and boost foreign inflows, have helped ​moderate overseas selling over ​the past two ⁠weeks, two traders said.

A revival in monsoon showers and improving earnings could also lure back global investors, who have sold a record $29.84 billion ​worth of Indian equities so far this year, they said.