Pre-Open Points To Muted Start For Benchmarks Amid Middle East Uncertainty

Mumbai, August 14: Indian shares were subdued at pre open pointing to a muted start for benchmarks as oil steadied after falling in the previous session as Middle East uncertainty continued to weigh. 

Nifty 50 declined 0.1% and Sensex dipped 0.16% at pre open while Gift Nifty rose 0.12%. 

Indian equities have remained under pressure this week, as heightened tensions in the Middle East have kept investors cautious despite a strong earnings season.  

Foreign portfolio investors continued to reduce their exposure to Indian equities, recording net sales of ₹511 crore ($53.54 million) on Thursday, according to provisional exchange data. It marked their third consecutive session of selling and added to the pressure on domestic benchmarks.  

Spotlight will fall on Tata Motors Passenger Vehicles which reported an 80% year-on-year decline in first-quarter profit, hurt by higher costs and foreign exchange losses, despite revenue rising more than 9%.  

LG Electronics India retained its fiscal-year revenue growth guidance after reporting a more than 27% increase in first-quarter profit. Strong summer demand for air conditioners and refrigerators supported the company’s performance.  

JSW Cement posted higher first-quarter profit as robust demand and price increases helped offset cost pressures, pointing to resilience in the domestic cement market. 

Asian Markets Advance 

Asian stocks climbed on Friday and were headed for their strongest weekly performance in nearly two months, helped by easing concerns over the U.S. interest-rate outlook following benign inflation data. 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2% and was on course for a weekly gain of around 2.7%, which would mark its strongest weekly performance since mid-June. 

Japan’s Nikkei rose around 0.8% and was set for a weekly gain of more than 5%, while South Korea’s Kospi advanced 1.5%. 

Investors, however, continued to monitor the U.S.-Iran standoff, with any disruption to oil supplies potentially pushing crude prices higher and reigniting concerns about inflation and global monetary policy. 

The yen hovered around 159.40 per dollar, keeping it close to the key 160 level. A further decline towards that threshold could raise expectations of intervention by Japanese authorities. 

Wall Street Closes At Record High 

U.S. stocks extended their recent rally on Thursday, with the S&P 500 closing at a record high as technology shares gained and investors reassessed the outlook for Federal Reserve interest rates. 

The Dow Jones Industrial Average rose 0.13%, while the S&P 500 gained 0.65%. The Nasdaq Composite advanced 0.81%, supported by gains in technology and other growth-oriented stocks. 

Sentiment was helped by U.S. producer-price data, which showed no increase in July. The reading strengthened expectations that the Federal Reserve may not need to raise interest rates at its September meeting. 

Lower Treasury yields also supported equities, while continued optimism over artificial intelligence-related investment provided an additional boost to technology stocks. 

European Markets End Flat 

European equities ended largely flat on Thursday as investors weighed lower crude prices against geopolitical risks and awaited euro zone inflation data. 

The pan-European STOXX 600 closed little changed at 659.24 points after retreating from a record high in the previous session. 

A decline in oil prices offered some relief to European markets, although energy and metal stocks remained under pressure. Investors continued to assess whether lower crude prices could be sustained given the uncertainty surrounding the U.S.-Iran conflict. 

Oil Prices Steady 

Crude oil remains one of the biggest variables for global markets, particularly for India. Brent crude was broadly steady around $87 a barrel on Friday after declining more than 2% in the previous session. Despite the recent fall, prices remained on course for a weekly gain of around 4%. 

Oil prices recovered some ground after the United States threatened to maintain its naval blockade of Iran indefinitely, raising concerns over potential disruptions to global supplies. 

For India, sustained high crude prices could put pressure on inflation, the rupee and corporate margins. With the country heavily dependent on imported oil, a prolonged rise in crude prices could also weigh on investor sentiment. 

Source

• Exchanges