Indian Stocks Set for Cautious Open Amid Rising Oil and Middle East Tensions
Indian benchmark indices are poised for a subdued start despite strong global cues, as escalating Middle East conflicts and surging crude prices weigh heavily on domestic risk appetite.
Indian stock markets are expected to open cautiously on Wednesday, diverging from a broad global rebound. The Gift Nifty traded around 24,108, indicating a discount of nearly 72 points from the previous close and signaling a negative start for domestic indices.
This follows a second consecutive session of losses on Tuesday. The Sensex declined 0.31 percent to 77,470.11, while the Nifty 50 settled 0.21 percent lower at 24,187.70, pressured by mounting regional anxieties.
Elevated crude oil prices and persistent geopolitical friction remain the primary headwinds for local investors. Brent crude futures rallied 1.22 percent to $92.12 a barrel, and US West Texas Intermediate crude gained 1.09 percent to $85.26, driven by fears of supply disruptions.
Supply concerns intensified after the US military completed its 11th consecutive day of strikes on Iranian military and logistics infrastructure. These developments continue to dominate risk sentiment across emerging markets.
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, expects domestic equities to remain range-bound. He noted that investor sentiment will continue to be influenced by "developments in West Asia and the trajectory of oil prices," alongside persistent foreign institutional selling and a weak rupee.
This domestic caution contrasts sharply with overnight gains in the United States and broader Asia. The Nasdaq Composite led Wall Street higher, surging 1.29 percent to 25,837.21, fueled by a robust rally in semiconductor shares.
Micron Technology jumped 12.17 percent, while Intel and AMD gained 8.64 percent and 8.11 percent, respectively. The Dow Jones Industrial Average and S&P 500 also advanced, closing at 52,224.64 and 7,509.20.
Asian markets broadly followed the positive lead, with South Korea’s Kospi jumping 5.37 percent and Japan’s Nikkei 225 rising 1.53 percent. However, Japan’s macroeconomic data showed a widening June trade deficit of 406.9 billion yen, significantly exceeding forecasts as import growth outpaced exports.
Inflation concerns in Japan pushed the benchmark 10-year government bond yield up 2.5 basis points to 2.745 percent. Meanwhile, the US dollar index held near a one-week high at 101.20, and spot gold extended its gains to $4,080.79 an ounce as investors sought safe-haven assets.
