India stocks set to open lower as Mideast tensions lift oil
Indian equities are poised for a weak start on Monday as escalating US-Iran military strikes push Brent crude above $90 a barrel, overshadowing strong corporate earnings from Reliance Industries and major lenders.
Indian benchmark indices are expected to open lower on Monday, with Gift Nifty trading down nearly 29 points at 24,293. The weak pricing follows a sharp escalation in geopolitical tensions and a broad selloff in global technology stocks.
Brent crude futures surged 2.71% to $90.49 a barrel, the highest level in over a month, after the US launched new airstrikes on Iran and Iran fired missiles toward Jordan. The conflict, which has also triggered air raid sirens in Bahrain, threatens to widen into neighboring Israel. For a net oil-importing economy like India, a sustained rise in energy costs raises inflation risks and pressures corporate margins.
The escalating conflict dragged down global equities. In the US, the Nasdaq Composite fell 1.40% to 25,520.24 on Friday, while the S&P 500 dropped 1.01% to 7,457.69 and the Dow Jones Industrial Average declined 0.77% to 52,146.42. A broad selloff in semiconductor and mega-cap technology shares drove the losses, with Nvidia, Microsoft, Meta, Alphabet, and Tesla all posting significant declines.
The weakness spread across Asia on Monday. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3%. South Korea’s Kospi dropped 1.43% and the Kosdaq slumped 3.77%, though Hong Kong Hang Seng index futures pointed to a higher open. Japanese markets were closed for a holiday.
The negative global backdrop arrives as India’s corporate earnings season kicks into high gear. Reliance Industries reported a 23.4% quarter-on-quarter jump in net profit to ₹20,946 crore, driven by double-digit growth across all business segments. Revenue rose 4.4% sequentially to ₹3,11,850 crore, while EBITDA grew 10% year-on-year to ₹54,067 crore.
The banking sector also provided dense data points over the weekend. Major private and public sector lenders, including HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, Yes Bank, Punjab National Bank, IDBI Bank, RBL Bank, and Punjab & Sind Bank, all declared their June quarter results.
Indian markets had closed Friday on a strong note, with the Sensex jumping 1.25% to 78,151.45 and the Nifty 50 settling 1.09% higher at 24,334.30. However, analysts urge caution amid the shifting macroeconomic winds. “While the broader trend has turned constructive again, we continue to advocate a stock-specific approach with a ‘buy-on-dips’ strategy, focusing on sectors and themes that are demonstrating strength on a rotational basis,” said Ajit Mishra, SVP of Research at Religare Broking Ltd.
Safe-haven assets showed mixed reactions. Spot gold prices fell 0.4% to $4,000.55 per ounce as US Federal Reserve policymakers signalled potential interest rate hikes to curb inflation. Spot silver bucked the trend, rising 0.9% to $56.42 an ounce.
