Pre-Open Points To Subdued Start For Benchmarks Amid Elevated Oil, Middle East Uncertainty

Mumbai, August 12: Indian shares were subdued at pre open signalling a muted start for benchmarks as Asian shares traded mixed and oil prices climbed on Middle East uncertainty.  

Nifty 50 edged down 0.04% and Sensex edged up 0.11% at pre open.    

To be sure, both benchmarks had declined 0.5% each yesterday amid concerns over energy prices.  

Shares of Tata Group companies could attract attention after a report said Tata Sons Chairman N Chandrasekaran may step down ahead of the holding company’s shareholder meeting scheduled for August 18. The development could put Tata Group stocks on investors’ radar as the market assesses potential leadership changes at the conglomerate.  

Godrej Consumer Products appointed Chief Financial Officer Aasif Malbari as CEO and Managing Director for a five-year term following Sudhir Sitapati’s resignation. The leadership change comes only months after Sitapati was reappointed to the positions, making the transition a key focus for investors.  

Manappuram Finance, a non-bank lender, backed by Bain Capital, posted first-quarter profit above market expectations, supported by strong loan growth in its core gold-financing business and signs of recovery in microfinance. The better-than-expected performance could draw investor interest in the stock. 

Asian Markets Mixed 

Asian stocks traded mixed in early deals, with investors balancing gains in regional equities against concerns over elevated crude oil prices. 

Japan’s Nikkei 225 was up 0.1%, while South Korea’s Kospi jumped 4.2%. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.8%. 

The rise in Asian equities came despite continued uncertainty in global energy markets. Oil prices extended their gains as uncertainty over the reopening of the Strait of Hormuz persisted, keeping investors alert to the potential impact of supply disruptions on inflation and economic growth. 

Wall Street Ends Lower 

U.S. equities closed lower on Tuesday as investors adopted a more cautious stance amid stalled U.S.-Iran negotiations and another rise in crude oil prices. 

The S&P 500 and Nasdaq were pressured by weakness in major technology stocks, while energy companies benefited from the increase in oil prices. The move reflected a broader rotation within markets as investors weighed geopolitical risks against the potential earnings boost for energy producers. 

The focus will now shift to U.S. inflation data for fresh clues on the Federal Reserve’s policy path. A prolonged rise in energy prices could complicate the inflation outlook and reduce expectations for aggressive monetary easing if higher fuel costs begin feeding into broader prices. 

European Stocks Remain Near Record Highs 

European equities proved relatively resilient on Tuesday, with the pan-European STOXX 600 ending almost flat and holding close to record levels. 

Energy stocks led the gains as higher crude prices lifted the sector, with the energy index rising 1.7%. Technology stocks also gained 1.1%, helping offset weakness elsewhere in the market. 

European equities have continued to draw support from optimism surrounding the earnings season, with expectations of strong second-quarter profit growth providing a fundamental cushion. 

However, the sharp rise in oil prices remains a key risk. A sustained increase in energy costs could push inflation higher and make it harder for central banks to deliver interest-rate cuts. 

Source

•  Exchanges