Indian shares set for muted start as US rate relief meets Middle East caution

Indian shares were on track for a subdued start on Thursday, as easing concerns over a U.S. rate hike after the latest inflation reading were offset by stalled Middle East peace ​efforts.

Stock-specific moves are likely to be in focus following MSCI’s index rebalancing announcement and ‌amid the ongoing quarterly earnings season.

GIFT Nifty futures were at 24,446 points as of 7:18 a.m. IST, indicating a muted start for the Nifty 50, which closed at 24,435.95 on Tuesday.

U.S. consumer prices barely increased in July, further reducing the ​likelihood of a Federal Reserve interest rate hike next month after soft jobs data released ​last week.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1%, led by ⁠a 4.4% jump in South Korean shares following the inflation data. MKTS/DATA

Lower interest rates in the U.S. can ​push Treasury yield and dollar lower, making emerging market equities such as India attractive for foreign investors.

India’s ​retail inflation data, released after market hours on Wednesday, showed consumer prices accelerated in July to 4.45%, but is still unlikely to push the central bank to hike interest rates over the next few months.

Oil prices fell 1% on Thursday ​as forecasters lowered global oil demand projections for 2026 because of the disruptions from the U.S.-Israeli ​war on Iran, though the supply constraints from the conflict provided a floor for the market.

Iran and the U.S. ‌remained at loggerheads ⁠over efforts to agree a permanent end to the war in the Gulf, Reuters reported on Thursday, citing a senior Iranian source, who said there had been no progress in talks to revive the interim deal agreed in June.

’Although Brent crude has eased modestly to below $89 per barrel, the unresolved situation ​in the Strait of ​Hormuz continues to keep ⁠the geopolitical risk premium in energy markets elevated,“ said Hariselvan Radhakrishnan, founder and CEO of HST Wealth.

Meanwhile, MSCI will add Laurus Labs, Lenskart, Adani Energy ​Solutions, and Groww to its flagship index, as part of a periodic review.