Indian shares seen opening lower as oil jumps on widening Mideast war
- GIFT Nifty futures were trading at 24,117
Indian shares were expected to open slightly lower on Wednesday as Brent crude jumped to a more than five-week high on the widening Middle East conflict, overshadowing firmer broader Asian markets.
Fears of further energy supply disruptions in the Middle East intensified after more attacks between the United States and Iran and a threatened naval blockadeof Saudi Arabia by Yemen’s Houthis.
Two oil tankers carrying Saudi crude to Asia reversed course in the Red Sea on Tuesday, while a tanker was hit in the Strait of Hormuz at the mouth of the Gulf.
GIFT Nifty futures were trading at 24,117 as of 7:56 a.m. IST, indicating the benchmark Nifty 50 could open below Tuesday’s close of 24,187.7.
Brent crude futures rose about 1.2% to $92 per barrel. Higher oil prices are negative for India, the world’s third-largest crude importer, as they can lift inflation, widen the trade gap, and squeeze corporate profits.
Even so, broader regional sentiment was steadier. Asian stocks jumped early on Wednesday, led by chip stocks, as investors looked past the jump in oil prices.
Foreign portfolio investors bought Indian shares worth 16.5 billion rupees ($171.46 million) on Tuesday, according to provisional data, while domestic institutional investors net sold 6.57 billion rupees of shares.
FPIs have bought Indian shares worth $1.43 billion so far in July, heading for their first monthly net purchase in five months.
Earnings will remain in focus as at least three Nifty 50 companies, Dr Reddy’s Laboratories, Eternal, and Nestle India, are set to report their quarterly results on Wednesday.
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