Asia Surge and Oil Slide Point to Positive Start for Indian Markets on Thursday

Mumbai, June 25:Indian benchmark indices are poised for a positive start on Thursday, tracking firm cues from Asian peers and crude oil prices extending their decline amid easing concerns over disruptions in the Middle East.

Investor sentiment globally has improved as tanker traffic through the Strait of Hormuz normalised following a preliminary U.S.-Iran peace agreement, reducing fears of supply shortages and helping crude retreat toward levels seen before the recent conflict.

Brent crude fell below $74 per barrel, extending losses from earlier in the week. The decline is seen as a positive development for India, one of the world’s largest crude importers, as lower oil prices ease pressure on inflation, government finances and corporate input costs.

The softer oil environment is expected to support sectors such as aviation, paints, chemicals, logistics and consumer-facing companies, while also helping improve the outlook for the country’s current account balance.

Asian Markets Advance

Asian equities surged on Thursday as investors welcomed strong earnings and forecasts from chip giants Micron and Qualcomm as well as the sharp fall in energy prices and signs that geopolitical risks in the Middle East may be receding.

South Korea’s KOSPI rose 5% while Japan’s Nikkei surgednearly 4%. MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 1.4%.

The improving risk appetite came after oil markets shrugged off earlier concerns over potential disruptions to shipping through the Strait of Hormuz, a critical route for global crude supplies. With vessel movements returning to normal levels, traders shifted their focus back to economic fundamentals and corporate earnings.

The broader tone across the region remained constructive, with investors betting that lower energy costs could support growth while easing inflationary pressures that have weighed on major economies in recent years.

Wall Street Lower

U.S. stocks finished lower overnight as investors continued to reassess lofty valuations in artificial intelligence-linked technology companies and weighed the outlook for interest rates.

The S&P 500 and Nasdaq Composite ended in losses, with technology stocks remaining under pressure amid concerns that massive AI-related investments may take longer than expected to generate meaningful returns.

Market participants also kept a close eye on signals from Federal Reserve officials for clues on the timing of future rate cuts. Uncertainty around the interest-rate outlook, combined with questions over the sustainability of the AI-driven rally, prompted investors to trim exposure to high-growth technology names.

Despite the weaker U.S. close, the decline in crude oil prices and improving geopolitical backdrop have helped offset some of the negative sentiment, allowing Asian markets to trade higher and providing support for risk assets globally.

Europe Remains Cautious

European shares ended little changed.

The pan-European STOXX 600 index hovered near flat levels.

For Indian markets, the combination of falling crude prices and surging Asian equities points to a constructive opening. Investors, however, are likely to keep a close watch on developments in U.S.-Iran negotiations and signals from major central banks, both of which remain key drivers of global risk sentiment.

Source:

• Exchanges