Indian Shares Jump At Pre-Open Signalling Positive Start Amid Oil Slide, Iran War Pause

Mumbai, July 27: Indian shares rose at pre open signalling a higher start for benchmarks as Iran and US paused their war sending oil spiralling downwards. 

Nifty 50 rose 0.6% and Sensex advanced 0.5% at pre open while Gift Nifty rose 0.8%. 

With a higher open, shares will break their losing streak of five sessions.  

Indian equities endured a bruising period last week, with the Nifty and Sensex shedding 2.3% and 2.7%, respectively, as both benchmarks closed lower in each of the five sessions. 

Last week’s market decline was fuelled by a combination of surging crude prices and selling pressure in private-sector lenders amid investor concerns that tighter margins could weigh on their earnings outlook.  

Tata Consumer Products could attract attention after the food and beverages maker reported first-quarter profit above analysts’ expectations, helped by resilient demand. The company also flagged the possibility of price increases across select products should volatility in input costs continue.  

SBI Card is likely to be watched after the credit-card issuer posted a rise in quarterly profit, supported by an improvement in asset quality.  

Meanwhile, Lodha Developers reported higher profit for the June quarter, whereas state-run Bank of Baroda saw earnings decline over the same period. 

Asia Advances 

Asian stocks traded mostly higher on Monday as investors welcomed the pause in fighting in the Gulf, which triggered a sharp decline in oil prices and eased concerns over the inflationary impact of elevated energy costs. 

MSCI’s broadest index of Asia-Pacific shares outside Japan was largely steady, with investors taking a cautious view of the prospect of a de-escalation and the possibility of reduced disruption to energy supplies. 

Japan’s Nikkei rose 0.2%, while South Korea’s Kospi declined 0.5%. Hong Kong’s Hang Seng gained 0.8%. 

The recovery in risk appetite followed a turbulent period for global markets, when escalating tensions between the US and Iran had pushed crude prices sharply higher and raised concerns that persistent energy inflation could weigh on economic growth and delay interest-rate cuts. 

US Stock Futures Rise 

US stock futures pointed to a stronger opening on Wall Street, with Dow Jones futures up around 0.5%, S&P 500 futures gaining 0.7% and Nasdaq-100 futures advancing about 1.2% in early trading. 

The gains reflected renewed optimism that the pause in hostilities could create room for diplomatic efforts, reducing the risk of a prolonged disruption to oil supplies and easing pressure on global inflation. 

European Futures Advance 

European equity futures also pointed to a positive start, with investors assessing the impact of lower energy prices on the region’s economy and corporate earnings. 

Euro Stoxx 50 futures rose 0.4%, while DAX futures gained 0.7%. FTSE futures were little changed. 

The decline in crude prices could be particularly supportive for European markets, where energy costs have been a major source of inflationary pressure. A sustained moderation in oil prices could ease inflation concerns and improve the outlook for interest rates, while also supporting consumer demand and corporate margins. 

Oil Prices Slide On US-Iran Pause 

The biggest market trigger remained the sharp fall in oil prices. Brent crude fell nearly 4% in early trading, while US West Texas Intermediate crude also declined, as the pause in US military action against Iran revived hopes that diplomatic efforts could eventually help normalise shipping through the Strait of Hormuz. 

The sharp reversal in crude prices marks a significant shift in sentiment after oil surged on fears that the conflict could disrupt supplies from the Middle East. Investors are now watching closely to see whether the pause develops into a more durable de-escalation. 

Lower Crude Prices Offer Relief To Oil-Importing India 

For India, the decline in crude prices is a significant positive. Lower oil prices could help contain the country’s import bill, ease pressure on the rupee and improve the outlook for inflation and corporate margins. 

Airlines, paints, tyres, chemicals and other fuel-sensitive industries could benefit from lower energy costs. A sustained decline in crude could also ease concerns around fuel prices and the broader impact of elevated energy costs on the economy. 

The retreat in oil prices may provide some relief to the broader Indian market, which has been grappling with concerns over higher energy costs and their potential impact on economic growth and corporate profitability. 

Source

• Exchanges