Indian Shares Decline at Pre-open as Nifty, Sensex See Negative Start Amid Oil Boil, Iran Conflict

Mumbai, July 13: Indian shares declined at pre-open on Monday signalling a negative start for benchmarks as Iran-US conflict escalated sending oil prices surging nearly 4%. 

Nifty 50 fell 0.4% and Sensex declined the same at pre-open while Gift Nifty went down 0.7%.  

To be sure, Indian equity benchmarks had ended last week in the red, with the Nifty 50 and Sensex each shedding around 0.3%, as escalating tensions in the Middle East triggered a sharp sell-off mid-week and halted the market’s four-week winning streak. 

The losses, however, were limited by foreign institutional investor (FII) inflows and an upbeat start to the earnings season. Strong quarterly results from IT bellwether Tata Consultancy Services (TCS) lifted sentiment towards the end of the week, helping the benchmark indices recoup a significant portion of their earlier declines.  

Spotlight will fall on LTIMindtree, which saw its June-quarter revenue rise about 18% year-on-year and net profit grow 17%, reflecting steady demand for its technology services despite a mixed global macro environment. 

Avenue Supermarts, the operator of DMart, posted growth in both revenue and net profit. The retailer also recorded improvement in operating profitability, with EBITDA margin up 8.3%. 

As for global cues, Asian markets traded broadly lower as investors rushed towards safe-haven assets following fears that the escalating conflict could disrupt oil supplies through the strategic Strait of Hormuz. Brent crude jumped nearly 4% to hover around $79 a barrel, while US West Texas Intermediate (WTI) crude gained a similar magnitude, stoking worries over renewed inflationary pressures. 

Japan’s Nikkei 225 fell more than 1%, while South Korea’s KOSPI plunged over 5% as investors priced in the impact of higher energy costs and rising bond yields on corporate earnings. MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.9%, reflecting the broad risk-off mood across regional markets. 

Oil prices surged after the US carried out fresh strikes on Iranian military targets over the weekend, prompting retaliatory measures from Tehran, including renewed threats to shipping through the Strait of Hormuz. The latest flare-up has revived concerns over prolonged instability in the Gulf, a region that handles a significant portion of global crude exports. 

For India, higher crude prices remain a key macro risk. As the country imports nearly 85% of its oil requirements, sustained gains in crude could fuel inflationary pressures, widen the current account deficit and weigh on corporate margins. Sectors such as aviation, paints, chemicals, logistics and oil marketing companies may face headwinds if oil prices remain elevated, while upstream oil and gas producers could benefit from firmer crude prices. 

Although Wall Street is yet to open for Monday’s session, US stock futures were trading lower as investors reassessed geopolitical risks following the weekend developments. Futures tied to the Dow Jones Industrial Average, S&P 500 and Nasdaq all slipped in Asian trading, indicating a cautious start for US equities after Friday’s gains. 

On Friday, Wall Street had closed in positive territory, with technology stocks linked to the artificial intelligence theme continuing to support the broader market despite lingering geopolitical concerns. The Dow Jones Industrial Average rose 0.29%, the S&P 500 gained 0.42% and the Nasdaq Composite advanced 0.29%, as investors focused on resilient corporate earnings and optimism around AI-driven growth. 

The renewed escalation over the weekend, however, has shifted market attention back to geopolitical risks. Investors will also closely watch upcoming US inflation data and Federal Reserve Chair Kevin Warsh’s testimony later this week for fresh clues on the interest rate outlook, particularly as higher oil prices threaten to complicate the inflation trajectory. 

Source

• Exchanges