Indian shares set for modest gains, but Mideast tensions keep investors wary
- GIFT Nifty futures were at 23,977.5 points
Indian shares are expected to open slightly higher despite recent losses, but escalating Middle East tensions and rising crude prices could temper investor sentiment and lead to caution.
- Escalating Middle East tensions and global market impact.
- Changes to India's pre-open session trading rules.
- Foreign investor selling and the cautious market outlook.
Indian shares were likely to open marginally higher on Monday after posting four consecutive weekly declines, although escalating tensions in the Middle East could weigh on risk sentiment.
Investors will also focus on changes to pre-open session rules, which bring the mechanism closer to the newly launched closing auction session (CAS) that has triggered sharp swings at the market close.
GIFT Nifty futures were at 23,977.5 points as of 7:09 a.m. IST, indicating a positive start for the Nifty 50 index, which closed at 23,897.7 on Friday.
The United States said it struck three Iranian tankers on Saturday after Iran launched ballistic missiles at two U.S. Navy ships, marking the latest escalation in tensions between the two countries.
Iran said it will step up efforts to tackle problems created by U.S. sanctions that have crippled its economy, while a senior Iranian official warned of a “painful response” if it comes under further attack.
Brent crude futures were up 0.4% at near $97 per barrel, while MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.9%.
Asian shares advanced after a robust U.S. jobs report reinforced confidence in global growth, even as it kept the door open for the Federal Reserve to hike interest rate at its meeting this month.
While GIFT Nifty signalled a flat-to-mildly positive start for the Indian market, investors were likely to remain cautious about building aggressive positions as geopolitical risks continued to cloud the near-term outlook, said Ponmudi R, CEO, Enrich Money.
The benchmark Nifty 50 and Sensex have shed 2.7% and 2.5%, respectively, over the past four weeks as higher oil prices and global bond yields weighed on sentiment.
Foreign investors net sold Indian shares worth 31.12 billion rupees ($329.38 million) on Friday, as per provisional data. They have offloaded $782 million worth of shares so far in September.