India shares set for flat open as oil surges, tech selloff hits
Indian equities are poised for a muted start as escalating US-Iran tensions push crude oil prices up more than 11% this week, while a broad semiconductor selloff and weak IT earnings from Wipro cap investor appetite.
Gift Nifty indicators suggest a steady open for Indian equities on Friday, though underlying sentiment remains cautious. The benchmark Sensex and Nifty 50 closed virtually unchanged on Thursday as global headwinds intensified.
Escalating military conflict between the US and Iran is the dominant macro risk. The US expanded airstrikes to target Iranian infrastructure, while Iran retaliated with missile attacks on US-allied nations and warned of further escalation. Brent crude surged 1.27% to $85.30 a barrel, with both Brent and US WTI futures on track for their largest weekly gains since April, rising more than 11%.
This geopolitical backdrop compounded a sharp selloff in US technology stocks overnight. The Nasdaq Composite dropped 1.47%, dragged down by heavy losses in the semiconductor sector. AMD, Broadcom, Intel, and Micron all fell more than 5%, while storage manufacturers SanDisk, Western Digital, and Seagate plunged up to 12.6%. The S&P 500 fell 0.51% and the Dow Jones Industrial Average lost 0.20%.
The equity declines occurred despite resilient US economic data. Retail sales rose 0.2% in June, matching consensus estimates and building on an upwardly revised 1.0% gain in May. Furthermore, initial unemployment claims dropped by 8,000 to a seasonally adjusted 208,000, beating forecasts of 217,000.
In Mumbai, the Q1FY27 earnings season is forcing investors to differentiate between companies. Wipro reported a 4.3% quarter-on-quarter decline in net profit to ₹3,352 crore. IT services revenue fell 1.2% in constant currency terms, and operating margins contracted by 130 basis points to 16%. The IT giant guided for current-quarter constant currency revenue to range between a 1.5% decline and 0.5% growth, while declaring an interim dividend of ₹2 per share.
Regional markets reflected the risk-off mood, with Japan’s Nikkei 225 crashing 3.33%. In the currency and commodity markets, the dollar index held at 100.72, while the Japanese yen languished near a 40-year low at 162.38 per dollar. Spot gold rose fractionally to $3,980.17 an ounce but is headed for its steepest weekly loss since early June on fears of a Federal Reserve rate hike. “Indian equities are expected to trade sideways to mixed amid weak global cues and ongoing geopolitical tensions in West Asia,” said Siddhartha Khemka of Motilal Oswal Financial Services, noting that stock-specific action will dominate.
