Indian Shares Edge Higher At Pre-Open Signalling Cautious Start As Oil Climbs 

Mumbai, August 10: Indian shares rose at pre open signalling a higher start for benchmarks as Asian stocks advanced but American and European futures stayed muted amid a rise in oil prices. 

Nifty 50 rose 0.16% and Sensex advanced 0.14% at pre open while Gift Nifty rose 0.4%.  

The upside could also remain restrained by volatility from the new closing-price mechanism and concerns over the RBI’s proposed curbs on flexible lending products offered by non-bank financial companies.  

Asian equities extended Wall Street’s gains on Monday as easing expectations for near-term U.S. rate increases boosted investor appetite for riskier assets, potentially strengthening the appeal of emerging-market stocks to overseas investors.  

Indian equities ended the previous week on a firm note, with the Nifty 50 advancing 0.8% and the Sensex rising 0.5%. The gains were supported by the RBI’s decision to keep its policy rate unchanged, softer crude prices, steady foreign buying and continued resilience in corporate earnings.  

Titan, a jewellery retailer, reported a sharp increase in June-quarter profit, helped by robust demand for jewellery. Dr. Reddy’s Laboratories, a drugmaker, ended its agreement with Novartis India covering the distribution and sale of products in the domestic market. For Oil India, quarterly profit more than tripled, driven by stronger crude oil prices and higher production. Ola Electric, an electric two-wheeler maker, narrowed its first-quarter loss as vehicle sales increased. 

Asia advances 

Asian equities largely traded higher on Monday after Wall Street ended the previous week on a strong note. Sentiment was helped by softer-than-expected U.S. jobs data, which eased concerns that interest rates could remain elevated for longer. Japan’s Nikkei climbed around 2%, while South Korea’s Kospi gained 0.13%. 

The positive trend across Asian markets could offer an early lift to Indian equities. However, the rise in oil prices, coupled with muted U.S. and European equity futures, suggests that investors may remain cautious about chasing gains. The Nifty 50 and Sensex could therefore see a flat-to-mildly positive opening, with market participants likely to remain selective amid a busy global macroeconomic calendar. 

Wall Street cues 

U.S. stocks finished last week on a stronger footing as the latest employment data reduced concerns over an immediate tightening in monetary policy and improved investor appetite for risk. 

The focus now shifts to the U.S. consumer price index for July, due later this week. The inflation reading will be closely watched for clues on whether the Federal Reserve has room to ease monetary policy and how quickly it could move on interest rates. 

A strong earnings season has also supported U.S. equities, helping the S&P 500 remain near record levels. However, Monday’s futures pointed to some consolidation following the recent rally. 

Nasdaq futures were up 0.19%, while S&P 500 futures gained 0.035%. Dow Jones futures, meanwhile, declined 0.13%. 

The mixed futures trend suggests that the positive momentum from Friday’s session may not translate into a broad-based rally at the start of the new week. 

European markets 

European markets were also headed for a subdued start, with futures pointing lower across major benchmarks. 

EUROSTOXX 50 futures declined 0.09%, DAX futures fell 0.10%, while FTSE futures slipped 0.32%. 

European equities are likely to remain sensitive to movements in crude oil, particularly as higher energy costs can feed into inflation and influence expectations for interest-rate cuts. Continued geopolitical uncertainty in the Middle East could therefore add to volatility in the region’s markets. 

Oil prices in focus 

Crude oil emerged as a key risk factor for global markets as uncertainty persisted over the reopening of the Strait of Hormuz, one of the world’s most important routes for oil shipments. 

Brent crude rose 1% to $84.4 a barrel, while West Texas Intermediate futures gained 0.7% to $78.7. 

Oil prices strengthened after Iran indicated that it was nearing an agreement with Oman on alternative shipping lanes, while the Strait of Hormuz remained closed pending the fulfilment of U.S. conditions. The uncertainty has kept markets from fully pricing in a return to normal energy flows. 

For India, a sustained rise in crude prices could prove particularly significant. As one of the world’s largest oil importers, India remains vulnerable to higher energy costs, which can increase the import bill, weigh on the rupee and put pressure on corporate margins. A prolonged oil rally could also complicate the domestic inflation outlook. 

Source

• Exchanges