Indian shares likely to open higher as oil prices slump

Indian shares were expected to open higher on Monday, outperforming broader Asia as Brent crude fell about 5% on rising hopes of peace in the Middle East.

GIFT Nifty futures ​were at 24,612.5 as of 7:57 a.m. IST, indicating the benchmark Nifty 50 could open above Friday’s close of 24,383.6.

US President Donald Trump said talks with Iran would happen on Monday but declined to set a deadline for an agreement.

He had earlier called off a planned attack on Iran in ​the hope of quickly reaching a deal to reopen the Strait of Hormuz and ​resolve the standoff over Tehran’s nuclear capabilities.

The prospect of a breakthrough pushed ⁠Brent crude futures down to three-week low of $81.55 per barrel.

Lower oil prices are positive for ​India, which imports the bulk of its energy needs.

The Nifty 50 and the BSE Sensex gained ​more than 2% in July, their second consecutive monthly rise, as resilient corporate earnings and foreign inflows helped offset volatility in crude prices driven by Middle East tensions.

Foreign investors bought Indian shares worth 2.77 billion rupees ($29.04 ​million) on Friday, as per provisional data, extending purchases to a third straight session.

Asian stock ​markets wobbled on Monday, with South Korea and Japan dropping about 4% and 2%, respectively, while the Japanese ‌yen ⁠jumped suddenly after the US and Japan confirmed joint intervention to prop up the frail currency.

Back home, market focus this week will be on the Reserve Bank of India’s policy decision, scheduled for August 5. The central bank is expected to keep interest rates unchanged, diverging from many of ​its global peers as ​inflation remains modest ⁠despite higher global oil prices.