Indian shares likely to fall as oil surge dents sentiment

Indian equities are likely to open lower on Thursday, as oil prices climbed past $95 a barrel after ​the US launched fresh strikes on Iran and Yemen’s Houthis targeted ‌oil tankers in the Red Sea, hurting global risk appetite.

Higher oil prices pose a key risk for India, the world’s third-largest ​crude importer and consumer, by stoking inflation, widening the ​trade gap, squeezing growth and corporate margins.

GIFT Nifty ⁠futures were at 23,864 as of 8:00 a.m. IST, ​indicating the benchmark Nifty 50 could open below Wednesday’s close ​of 23,996.25.

Indian blue chips posted their biggest one-day loss in two weeks in the previous session. Foreign institutional investors sold shares worth ​8.19 billion rupees, while domestic institutional investors sold 4.18 ​billion rupees, according to provisional data.

“Selling pressure has intensified as crude oil ‌prices ⁠showed a renewed upward bias, with worries about higher inflation and widening deficits keeping sentiment bearish,” said Ankur Punj, managing director and business head at Equirus Wealth.

While overall sentiment ​remains fragile, ​markets are likely ⁠to see sharp earnings-driven moves, analysts said.

Private lender IndusInd Bank  could climb after quarterly ​profit exceeded expectations, helped by lower provisions.

Drugmaker Dr ​Reddy’s could ⁠come under pressure after warning about semaglutide supply and missing quarterly profit expectations.

Oil marketing company Hindustan Petroleum its first quarterly loss ⁠since ​2022, as surging crude weighed on ​profitability.

Nifty constituents Cipla, Infosys and InterGlobe Aviation report results later in the ​day.