Pre-Open Points To Negative Start As Oil Tops $91 Amid Middle East Tensions 

Mumbai, August 18: Indian shares were lower at pre open signalling a negative start for benchmarks as oil topped $91 per barrel as the US-Iran ceasefire ended.  

Nifty 50 declined 0.2% and Sensex declined 0.4% at pre open.  

The Nifty 50 has remained under pressure for five consecutive trading sessions, extending its losing streak, while the Sensex has closed lower in four of the past five sessions.  

Foreign portfolio investors (FPIs) remained sellers in Indian equities on Monday, pulling out Rs 2,535 crore, according to provisional NSE data. Domestic institutional investors (DIIs), however, provided a cushion by purchasing shares worth Rs 5,101 crore.  

Spotlight will fall on Bharti Airtel as Airtel Payments Bank has appointed Shabnam Sinha as chairperson, replacing group chairman Sunil Bharti Mittal. Sinha will take over after Mittal’s term ends on September 30.  

Ceigall India said the Delhi Public Works Department has cancelled a tender worth Rs 331 crore, a development that could be relevant for the road construction and infrastructure player.  

Piccadily Agro said it has received no adverse observation or no-objection letters from both BSE and NSE for its proposed demerger involving Piccadily Food & Essentials.  

Netweb Technologies has launched a qualified institutional placement (QIP) with a floor price of Rs 4,885.90 per share, setting the reference price for the proposed institutional fundraising. 

Asian Markets Trade Lower 

Asian equities traded lower in early deals, with MSCI’s broadest index of Asia-Pacific shares outside Japan declining 0.4%. 

South Korea’s KOSPI fell 0.6% after returning to trade following a holiday, while Japan’s Nikkei 225 dropped 1.6%. The weakness across major Asian markets is likely to weigh on domestic sentiment and could set a negative tone for Indian equities at the opening bell. 

Investors remained cautious as geopolitical risks and higher oil prices added to concerns over the global economic outlook. 

Wall Street Ends Lower; Tech Stocks Mixed 

US equities ended lower in the previous session, with the Dow Jones Industrial Average falling 0.51%, the S&P 500 declining 0.52% and the Nasdaq Composite slipping 0.31%. 

The weakness came as investors assessed economic data and looked ahead to a fresh batch of retail earnings, while the sharp rise in crude oil prices added to concerns over inflation. 

Technology stocks remained mixed. Micron Technology gained 4%, while Applied Materials advanced 5.5%. In contrast, the S&P 500 Software & Services index declined 2.8%, with Microsoft and Meta Platforms falling more than 3% each. 

The mixed performance in technology stocks could keep Indian IT and technology shares under pressure, particularly after the broader weakness on Wall Street. 

US Futures Point To Weak Opening 

US stock futures were also trading lower in early Asian hours, with S&P 500 e-mini futures declining 0.3%. 

The weakness in futures suggests that Wall Street is likely to remain under pressure, with investors continuing to monitor oil prices, geopolitical developments and inflation expectations. 

For emerging markets such as India, the combination of weaker global equities and elevated crude prices could limit risk appetite and keep foreign investor flows in focus. 

Oil Above $91 As US-Iran Truce Ends 

Crude oil remains one of the biggest concerns for global markets, particularly for oil-importing economies such as India. 

Brent crude futures rose 0.5% to $91.30 a barrel in Asian trade after gaining more than $2 in the previous session. The latest rise came after a temporary US-Iran ceasefire ended, with investors increasingly concerned that the absence of progress on diplomatic efforts could prolong uncertainty around energy supplies. 

For India, a sustained rise in crude prices above $90 a barrel could increase concerns over the country’s import bill, inflation and corporate profitability. Oil-sensitive sectors are therefore likely to remain in focus, while upstream energy companies could benefit from higher crude prices. 

Global Bond Yields Keep Investors Cautious 

Rising global bond yields are adding another layer of caution to the market. The US 10-year Treasury yield climbed 0.8 basis point to 4.728%, while the 30-year yield rose 0.6 basis point to 5.3146%, its highest level in more than two decades. 

Japan’s 10-year government bond yield also increased 2.5 basis points to 2.945%, a three-decade high. 

Higher yields can make fixed-income assets more attractive relative to equities and could put pressure on flows towards emerging markets. Investors will therefore closely monitor foreign institutional investor activity for signs of further selling pressure in Indian equities. 

Gold Gains As Dollar Stays Near Two-Month Low 

Other asset classes are also reflecting the cautious global mood. The dollar remained near a two-month low, while gold extended its gains for a third straight session, rising 0.1% to $4,420.07 an ounce. 

The combination of higher crude prices, firm gold and elevated bond yields highlights continued investor uncertainty, with geopolitical developments remaining a key driver of global asset allocation. 

Source

• Exchanges