Indian Shares Inch Up at Pre-Open Signalling Higher Start for Benchmarks as US Inflation Offsets Oil, Iran

Mumbai, July 15: Indian shares inched up at pre-open on Wednesday, signalling a higher start for benchmarks as a drop in US inflation countered surging oil and rising Middle East tensions.  

Nifty 50 rose 0.14% and Sensex rose 0.18% at pre-open. 

To be sure, both the Nifty 50 and the Sensex fell 0.7% each on Tuesday, ending a three-session winning streak. 

L&T Technology Services will be closely watched after the engineering R&D company reported an 11.5% year-on-year increase in consolidated revenue for the June quarter, reflecting steady demand for its technology and engineering services. 

Tata Elxsi is also expected to remain in focus after posting an 18.2% jump in first-quarter net profit. 

Wipro and Infosys are likely to remain under pressure after their US-listed ADRs declined overnight, tracking weakness in IBM. 

As for global cues, Asian markets traded firmly in the green after US consumer prices unexpectedly declined in June, marking the first monthly drop since the pandemic and strengthening expectations that the Federal Reserve could adopt a less hawkish stance in the coming months. 

The benign inflation reading dragged US Treasury yields lower, weakened the dollar and boosted appetite for risk assets across the region. 

Japan’s Nikkei 225 advanced 0.9%, while South Korea’s Kospi surged 7.4%, emerging as the best-performing major Asian index. MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.2%, reflecting improved regional sentiment. 

Technology and other growth-oriented sectors benefited the most from expectations of a more accommodative interest-rate outlook. 

US markets ended higher overnight, with the S&P 500 and Nasdaq extending gains after the softer inflation print and robust quarterly earnings from leading Wall Street lenders. 

Strong results from JPMorgan Chase and Goldman Sachs provided an encouraging start to the second-quarter earnings season, reinforcing investor confidence in the resilience of corporate America despite lingering geopolitical uncertainty. 

However, IBM bucked the broader trend, with its shares falling after the company issued a disappointing outlook, highlighting continued caution around technology earnings. 

The cooling inflation data also pushed Treasury yields lower and weighed on the US dollar, providing additional support to global equities. 

European equities recovered from early losses on Tuesday after investors looked past initial concerns over escalating tensions between the US and Iran. 

The pan-European STOXX 600 index ended about 0.2% higher as softer-than-expected US inflation improved expectations for global monetary policy and helped offset worries stemming from geopolitical developments in the Middle East. 

Despite the positive equity sentiment, crude oil prices remained elevated after fresh attacks involving US and Iranian energy infrastructure heightened fears of supply disruptions. 

Brent crude hovered near one-month highs of around $85 a barrel as renewed hostilities raised concerns over energy supplies from the Gulf. While reports indicated that the US had paused certain measures related to shipping through the Strait of Hormuz, traders continued to closely monitor developments in the region. 

For India, higher crude prices remain a significant concern given the country’s dependence on imported oil. Sustained strength in energy prices could fuel inflation, weaken the rupee and squeeze margins for fuel-intensive sectors such as oil marketing companies, airlines and logistics firms. 

Source

• Exchanges