Indian Shares Tick Up at Pre-Open Pointing to Cautious Start Amid Escalating Hostilities in Middle East

Mumbai, July 17: Indian shares ticked up at pre-open on Friday signalling a cautious start for benchmarks as Iran and the US continue to clash sending oil prices higher. 

Nifty 50 rose 0.18% and Sensex advanced the same at pre-open.  

Reliance Industries, India’s largest company by market value, is set to announce its June-quarter earnings after market hours on Friday. Investors will then turn their attention to the banking sector, with private lending giants HDFC Bank and ICICI Bank slated to report their quarterly numbers over the weekend.  

IT stocks are expected to remain in the spotlight after a divergent set of quarterly results from sector heavyweights. Wipro disappointed investors with weaker-than-expected earnings and a subdued business outlook, reinforcing concerns over a slow demand recovery. In contrast, Tech Mahindra outperformed revenue estimates, aided by its manufacturing vertical and currency tailwinds from a weaker rupee.  

Jio Financial Services reported a sharp jump in June-quarter earnings, with net profit more than doubling as growth accelerated across its businesses. In contrast, tyre maker CEAT fell short of profit estimates after higher raw material costs squeezed margins, while dairy products maker Heritage Foods reported a year-on-year decline in first-quarter profit. 

Asian equities retreat 

Asian stocks traded sharply lower on Friday as investors continued to trim exposure to technology shares, while escalating geopolitical tensions fuelled demand for safe-haven assets and lifted oil prices. 

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 2%, while Japan’s Nikkei tumbled 4.4% as semiconductor stocks bore the brunt of the selloff. South Korean markets were closed for a public holiday. 

Technology stocks remained under pressure as investors reassessed lofty artificial intelligence valuations despite strong earnings from major chipmakers. At the same time, market participants rotated towards relatively defensive sectors such as financials, supported by upbeat earnings from leading global banks. 

Risk aversion also boosted gold prices, while the U.S. dollar traded largely steady as investors weighed safe-haven demand against expectations that the Federal Reserve is unlikely to tighten monetary policy further in the near term. 

Wall Street declines 

U.S. equities ended lower overnight as a broad selloff in semiconductor stocks offset optimism from another round of solid corporate earnings and easing inflation. 

The Nasdaq Composite led the declines, shedding 1.47% as chipmakers came under heavy pressure. The S&P 500 and the Dow Jones Industrial Average also closed in negative territory. 

Despite healthy quarterly results from several large U.S. companies, investors booked profits in high-flying artificial intelligence-linked stocks, shifting their focus to upcoming earnings reports and macroeconomic data that could provide fresh clues on the Federal Reserve’s policy path. 

European markets remain subdued 

European equities ended little changed on Thursday as investors balanced encouraging corporate earnings against mounting concerns over the Middle East conflict. 

Positive earnings updates lent support to select sectors, but gains remained limited amid worries that persistently high energy prices could rekindle inflationary pressures and dampen economic growth across the region. 

Technology stocks also remained under pressure, reflecting the broader weakness seen in global semiconductor counters. 

Oil climbs as Middle East conflict intensifies 

Crude oil remained the key focus for financial markets. 

Brent crude traded close to $85 per barrel, while U.S. West Texas Intermediate hovered near $80 after renewed military exchanges between the United States and Iran heightened concerns over potential supply disruptions. 

The latest escalation follows fresh U.S. strikes near Iran’s southern coastline and retaliatory Iranian missile and drone attacks. Investor concerns intensified further after reports that Iran had directed Yemen’s Houthi movement to prepare for possible disruption of shipping through the Red Sea if hostilities continue. 

Both Brent and WTI are on track to post weekly gains of nearly 12%, raising fresh concerns over imported inflation, particularly for major crude-importing nations such as India. 

Source

•  Exchanges