Nifty Declines, Sensex Jumps At Pre-Open Pointing To Mixed Start For Benchmarks 

Mumbai, August 4: Indian shares were mixed at pre open signalling a mixed start for benchmarks as Asian shares traded lower and oil staged a rebound on uncertainty around Middle East. 

Nifty 50 declined 0.3% and Sensex rose 0.6% at pre open. 

To be sure, both the Nifty and the Sensex had jumped 1.6% and 0.7% on Monday.  

The Centre is set to offload as much as a 6.5% stake in Life Insurance Corporation of India through an offer-for-sale, as it moves to bring the state-owned insurer’s public shareholding in line with regulatory norms. DLF, the real estate major, reported a 4.1% year-on-year increase in profit for the June quarter. The food safety regulator has barred Dabur India from selling products carrying claims such as “100% natural”, “100% pure” and “100% organic”, in a move aimed at curbing potentially misleading labelling and marketing practices. SBI Funds Management, an asset management company, reported a rise in profit in its first quarterly earnings announcement since its stock market listing.

Asian Markets Trade Lower 

Asian stocks traded lower on Tuesday as uncertainty over the latest US-Iran developments and a rebound in crude oil prices weighed on investor sentiment. 

Japan’s Nikkei declined 0.7%, while South Korea’s Kospi fell 0.5%. MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.3%. 

The cautious trend in Asian markets could weigh on domestic equities at the open, with investors likely to assess global risk sentiment alongside developments in crude oil prices. 

Wall Street Rallies To Record Highs 

US stocks kicked off August on a strong note, with the Dow Jones Industrial Average closing at a record high as optimism over a possible de-escalation in tensions between the US and Iran boosted investor sentiment. 

The Dow gained 1.32%, while the S&P 500 advanced 1.48% and the Nasdaq Composite jumped 2.13%. The rally was supported by expectations of diplomatic progress, which also helped push Treasury yields lower. 

Communication services stocks led gains on Wall Street, with shares of Meta Platforms and Alphabet among the major contributors. Investors also continued to focus on corporate earnings and the resilience of corporate profits. 

However, concerns around elevated technology valuations, artificial intelligence-led growth expectations and the Federal Reserve’s interest-rate outlook remain in focus. 

European Markets Start August On Stronger Footing 

European equities also started August on a positive note, with the pan-European STOXX 600 gaining 0.5% and closing near a record high. The rally was supported by a sharp fall in oil prices as hopes of diplomatic progress between the US and Iran eased concerns over potential disruptions to energy supplies. 

Travel and leisure stocks benefited from lower crude prices, while defence stocks also gained amid shifting geopolitical expectations. However, the FTSE 100 bucked the broader trend and slipped 0.1%. 

Healthcare stocks came under pressure after AstraZeneca shares fell sharply amid reports of a potential $400 billion merger with Bristol Myers Squibb. The healthcare sector declined 1.7%, while France’s Ipsen also fell following a broker downgrade. 

Oil Prices Rebound After Sharp Sell-Off 

Crude oil prices recovered on Tuesday after plunging in the previous session as markets assessed the possibility of a diplomatic breakthrough to end the US-Iran conflict. 

Brent crude rose 1.2% as investors remained uncertain about the prospects for talks and the potential impact on global energy supplies. 

The sharp fall in oil prices in the previous session had offered relief to oil-importing economies such as India, helping ease concerns around inflation, the import bill and the current account deficit. A sustained decline in crude prices could therefore benefit Indian equities, particularly sectors sensitive to energy costs. 

However, the rebound in oil prices highlights the continuing uncertainty surrounding the geopolitical situation. Any setback in US-Iran negotiations or renewed concerns over supply disruptions could trigger another sharp move in crude prices and weigh on global risk sentiment. 

Source

• Exchanges