Nifty Flatlines, Sensex Edges Down At Pre-Open Signalling Subdued Start For Benchmarks 

Mumbai, August 17: Indian shares were subdued at pre open signalling a muted start for benchmarks as oil prices rose amid deadlocked diplomacy in the Middle East. 

Nifty 50 edged down 0.05% and Sensex declined 0.2% at pre open. 

Indian equities ended the previous week on a weak footing, with the Nifty 50 declining 0.8% and the Sensex losing 0.6%, as persistent uncertainty around the Middle East and elevated crude oil prices weighed on investor sentiment.  

The selling pressure eased towards the end of the week, with foreign portfolio investors turning net buyers on Friday after three straight sessions of outflows. Foreign investors purchased Indian equities worth Rs 508 crore on a net basis, while domestic institutional investors bought shares worth Rs 356 crore.  

Reliance Industries is set to explore a strategic partnership with UK-based Rolls-Royce for the development and production of an aircraft engine for India’s fighter jet programme.  

Edtech platform PhysicsWallah posted a significant improvement in its first-quarter performance, with consolidated losses narrowing to Rs 77.57 crore from Rs 120 crore a year earlier. Revenue grew 24.4% during the quarter, reflecting expansion in its core business.  

Voltas reported a strong jump in first-quarter profit, driven by robust demand for room air conditioners. The consumer durables maker benefited from strong summer demand, which supported sales of its cooling products during the quarter. 

Asian Markets Subdued 

Asian equities traded largely subdued in early deals as investors assessed the economic and inflationary risks stemming from the ongoing Middle East conflict. Japan’s Nikkei was almost flat, edging up 0.01%, while Australia’s resource-heavy ASX 200 declined 0.36%. South Korean markets remained closed for a holiday. 

Investors were also awaiting key economic data from China, including industrial production and retail sales figures, for fresh indications of the health of the world’s second-largest economy. Concerns over China’s growth trajectory continue to influence sentiment across Asian markets. 

The muted regional trend points to a cautious opening for Indian equities, with investors likely to avoid taking aggressive positions in the absence of stronger global cues. Movements in crude oil will remain particularly important for domestic markets, given India’s reliance on imported energy and the impact of oil prices on inflation, the rupee and corporate profitability. 

US Futures Edge Higher 

US stock futures traded slightly higher, with Nasdaq futures gaining around 0.3%, providing some support to global risk appetite. Investors have been increasingly factoring in the possibility of a less restrictive monetary policy stance from the US Federal Reserve, following softer economic indicators. 

The resilience in US futures could help limit downside pressure on Indian equities at the open. However, the modest gains suggest that investors remain cautious, particularly as uncertainty surrounding the Middle East continues to cloud the global market outlook. 

A sustained increase in crude oil prices could also revive inflation concerns and make it more difficult for central banks to ease monetary policy, potentially limiting the upside for risk assets. 

Oil Prices Rise As Hormuz Traffic Slows 

Crude oil remains the biggest near-term risk for global markets. Oil prices moved higher on Monday after US-Iran peace talks stalled and shipping traffic through the Strait of Hormuz slowed sharply. 

Brent crude rose 0.5% to around $88.9 a barrel, while West Texas Intermediate gained 0.15% to $82.5 a barrel. Both benchmarks had advanced more than 5% last week following attacks on tankers and an oil refinery in the region. 

The sharp decline in shipping activity through the Strait has added to concerns over global energy supplies. According to data cited by Reuters, only five commodity vessels passed through the waterway on Saturday, while none crossed on Sunday, compared with 31 vessels during the previous weekend. 

The Strait of Hormuz is a critical global energy corridor, making any prolonged disruption a potential source of further volatility in crude prices. Higher oil prices could, in turn, increase inflationary pressures and weigh on economic growth across major importing economies. 

Source

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