Indian shares slide as Middle East conflict drives crude above $96
Indian benchmark indices fell for a fourth consecutive session as escalating Middle East conflicts pushed crude oil prices above $96 a barrel, threatening to widen the trade deficit and stoke inflation in the world's third-largest oil importer.
Indian equities extended losses on Thursday, with the Nifty 50 declining 0.27% to 23,931.10 and the BSE Sensex dropping 0.24% to 76,572.90 by midday. The benchmarks are now on track for a fourth consecutive session of declines, having fallen 1.7% and 2.2%, respectively, over the current losing streak.
The selling pressure stems from a sharp escalation in Middle East geopolitical tensions. Fresh US strikes on Iran and attacks by Yemen's Houthi rebels on oil tankers in the Red Sea have disrupted risk appetite globally, pushing crude oil prices above $96 a barrel.
For India, this energy price spike carries acute macroeconomic risks. As the world's third-largest crude oil importer and consumer, sustained elevated prices threaten to fuel domestic inflation, widen the current trade deficit, and compress corporate profit margins. The Indian rupee's simultaneous depreciation against the US dollar is compounding these structural concerns and raising fears of slower economic growth.
Weak corporate earnings are reinforcing the negative sentiment. Dr Reddy's Laboratories and HPCL both fell approximately 3% after reporting disappointing results for the June quarter, underscoring the margin pressures already facing Indian businesses.
From a technical perspective, the Nifty 50 is approaching immediate support at 23,800. Analysts anticipate a potential recovery from that level later in the session, though a breach could push the index down to a secondary support of 23,650. On the upside, immediate resistance remains capped at 24,000.
Despite the broader market weakness, some individual names are attracting buying interest. Analyst Nagaraj Shetti highlighted Bajaj Auto and Epigral as short-term candidates based on their chart patterns. Bajaj Auto is exhibiting a strong uptrend characterized by higher tops and bottoms, expanding volumes, and positive relative strength indicators. Epigral has recently reversed from its lows, breaking a downward-sloping trend line on its weekly chart with supportive volume patterns.
