Asian Markets Mixed, Oil Climbs, Wall Street Mixed; D-street Stares at Negative Start 

Mumbai, July 9: Indian benchmark indices are likely to open lower on Thursday as Asian markets trade mixed amid concerns stemming from elevated crude oil prices and overnight losses on Wall Street following renewed hostilities between the US and Iran.

Asian equity markets traded mixed. Japan’s Nikkei rallied 2%, South Korea’s Kospi declined 1.3%, and MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.4%.

Traders continued to monitor developments in the Middle East and the impact of rising oil prices on inflation and economic growth.

Wall Street Ends Mixed as Trump Says Iran Deal ‘Over’

US equities witnessed sharp intraday volatility overnight after President Donald Trump declared that the interim agreement with Iran was “over” following fresh US military strikes.

The Dow Jones Industrial Average fell 1.09%, emerging as the biggest laggard among the three major indices, while the S&P 500 declined 0.28%. The Nasdaq Composite managed to close marginally higher, supported by a strong rally in Nvidia and other technology stocks.

Investor sentiment remained fragile as fears of an escalation in the conflict pushed oil prices sharply higher, raising concerns over renewed inflationary pressures and the possibility that central banks may have to keep interest rates elevated for longer.

Oil at $79 as Fresh US Strikes on Iran Heighten Supply Fears

Crude oil prices extended their rally on Thursday after the US launched fresh strikes on Iran, intensifying concerns over supply disruptions in the Middle East. Brent crude rose 1.3% to $79.04 a barrel, building on Wednesday’s surge.

The latest gains came after President Donald Trump declared the interim peace agreement with Iran “over”, prompting renewed military action aimed at keeping the Strait of Hormuz open following attacks on commercial vessels. The waterway, which handled around a fifth of global oil supplies before the conflict, remains under close watch, with shipping expected to slow as insurers reassess risks amid escalating hostilities.

The sustained rise in crude prices has revived concerns over inflation and global growth, pushing bond yields higher and weighing on investor sentiment. For India, which imports more than 85% of its crude oil requirements, elevated oil prices could pressure inflation, the current account deficit and corporate profitability, making energy prices a key risk factor for domestic equities.

Lower Opening Likely for Indian Markets

The mixed global cues suggest Indian equities could witness a lower start on Thursday.

Elevated crude oil prices remain a key overhang for the Indian market. India imports more than 85% of its crude oil requirements, making higher energy prices a significant risk for inflation, the fiscal balance and corporate margins.

Domestic benchmarks had logged their steepest decline in more than three months in the previous session as investors reacted to the sharp jump in oil prices and fears of a wider Middle East conflict. Market participants will continue to monitor geopolitical developments, movements in crude oil and global risk sentiment for further direction.

Source:

• Exchanges