Indian shares seen opening lower as high oil prices fuel inflation worries
- GIFT Nifty futures were at 22,643
Indian shares are poised for a lower open, extending losses, as escalating Middle East tensions keep oil prices above $110, stoking inflation concerns and impacting India's economy.
- Escalating Middle East war and oil price surge.
- India's inflation concerns and potential rate hikes.
- Jio Platforms' successful initial public offering.
Indian shares are expected to open lower on Thursday, extending losses from the previous two sessions, as the escalating Middle East war keeps oil above $110 per barrel, stoking inflation concerns.
GIFT Nifty futures were at 22,643 at 7:55 a.m. IST (0225 GMT), indicating a negative start for the benchmark Nifty 50 which closed at 22,811.35 on Wednesday.
Brent crude futures were up 1.3% at $110.3 per barrel as more attacks in Saudi Arabia by Yemen’s Houthis prompted the United States to order some diplomats and family members to leave its missions in the kingdom.
Higher oil prices are a negative for India, which imports the bulk of its energy requirements, as they can increase inflation, strain its fiscal deficit and hit corporate profits.
Members of India’s rate-setting panel indicated that further rate hikes may be needed to curb inflation but stopped short of endorsing an aggressive tightening cycle over risks to economic growth, minutes of the committee’s meeting released on Wednesday showed.
The Nifty 50 and BSE Sensex have shed 1.5% and 1.4%, respectively, this week.
Meanwhile, foreign investors bought Indian shares worth 10.22 billion rupees ($108.19 million) on Wednesday, according to provisional data.
This would be their second session of buying in three.
The focus will remain on Jio Platforms’ initial public offering. The $3.2 billion issue was fully subscribed within a couple of hours of launch on Wednesday, as institutional investors flocked to India’s largest offering.