Indian shares seen lower as oil stays near six-month high, Fed in focus
- GIFT Nifty futures were at 22,669.5
Indian shares are expected to open lower due to elevated crude oil prices and investor caution ahead of the US Fed's policy decision, compounded by foreign outflows.
- Impact of rising Brent crude prices on India's economy.
- US Federal Reserve's upcoming policy decision and market implications.
- Reasons for significant foreign investor sell-offs in Indian equities.
- India's market underperformance due to limited AI exposure.
Indian shares are set to open lower on Tuesday, giving back some of the previous session’s gains, as Brent crude prices remained near $115 a barrel and investors stayed cautious ahead of the US Federal Reserve’s policy decision later this week.
GIFT Nifty futures were at 22,669.5 at 7:53 a.m. IST, indicating a negative start for the benchmark Nifty 50, which closed at 22,753.2 on Monday.
The Nifty 50 and BSE Sensex rose 0.7% on Monday, snapping a four-session losing streak, helped by post-earnings gains in select stocks.
Brent crude futures hovered near a six-month high after attacks on Saudi Arabia dampened hopes for an immediate easing of tensions in the region.
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.
US Federal Reserve is expected to hold interest rates steady on Wednesday, before resuming its tightening cycle with a December increase, as per a Reuters poll of economists.
“A hawkish signal could lift yields and the dollar and restrict emerging-market flows, while balanced guidance may allow the recent equity recovery to broaden,” said Hariselvan Radhakrishnan, founder and CEO of HST Wealth.
Foreign investors sold Indian shares worth 14.62 billion rupees ($153.60 million) on Monday, as per provisional data. They have offloaded shares worth $4.75 billion so far in October and a record $32.56 billion in 2026.
Asian stocks rose more than 1%, lifted by a rally in AI-linked stocks, after Claude-owner Anthropic filed a prospectus for a record-breaking IPO.
India’s lack of large AI exposure has been one of the key reasons for record foreign selloff and sharp underperformance of benchmark Nifty 50 to emerging market peers.