Dalal Street Stares at a Muted Start as Shares Edge Lower at Pre-open Amid Crude, Monsoon Worries

Mumbai, June 2:Indian shares traded lower at pre-opensignalling a muted start for benchmark indices as oil prices edged down but remained elevated with tensions rising in the Middle East.

Nifty 50 declined 0.22% at pre-open while the Sensex went down 0.07%, in step with the Gift Nifty futures which traded at 23,266.50 which is below Nifty 50’s Monday close of 23,382.6. Both benchmark indices have declined for four straight sessions amid persistent foreign outflows.

Moreover, the forecast of the weakest monsoon in 11 years compounded concerns over agricultural output and food prices, posing another challenge for India’s economy as it contends with inflationary pressures linked to the Iran war.

Going ahead, the Reserve Bank of India is seen holding its benchmark lending rate unchanged on Friday as policymakers assess evolving inflation and growth risks.

Spotlight will be falling on Ola Electric Mobility, NHPC, and Wipro. Ola Electric Mobility started a qualified institutional placement yesterday,the floor price set at Rs 37.74 per share. Also, the government announced an offer for sale for up to a 6% stake in NHPC, the floor price set atRs 71 per share. Wipro said it will acquire an extra 20% stake in insurtech company Aggne Global for $28.5 million.

Asian equities traded mixed, with MSCI’s broadest index of Asia-Pacific shares outside Japan slipping 0.14%. Japan’s Nikkei 225 and South Korean stocks declined as investors pared risk exposure amid fears that geopolitical tensions could disrupt global energy supplies and stoke inflation. Hong Kong’s Hang Seng bucked the trend, rising 1.6%.

U.S. stocks ended higher overnight, offering some support to global sentiment despite geopolitical uncertainties.

The S&P 500 rose 0.3%, aided by continued enthusiasm around artificial intelligence investments and signs of resilience in the U.S. economy. Stronger-than-expected manufacturing data reinforced confidence in economic growth, helping investors look past concerns over trade tariffs and geopolitical risks.

Technology shares remained at the forefront of gains as investors continued to favour companies positioned to benefit from the AI boom. However, caution persisted in Asian trading hours, with S&P 500 futures edging lower.

European equities closed lower on Monday as renewed Middle East tensions dampened risk appetite and revived concerns over higher energy costs.

Investors worried that any prolonged disruption in the region could push oil prices higher, complicating the inflation outlook and limiting the room for central banks to ease monetary policy. Energy-sensitive sectors bore the brunt of the selling pressure as markets evaluated the economic implications of sustained strength in crude prices.

The weakness in European markets underscored growing concerns that geopolitical risks could overshadow improving economic indicators.

Oil prices remained near recent highs, keeping investors on edge. Brent crude steadied after a sharp rally before edging lower, though uncertainty over U.S.-Iran talks continued to support prices.

For India, elevated crude prices remain a key concern as they increase import costs, pressure the rupee and raise inflation risks. Higher fuel prices could also weigh on margins for sectors such as aviation, paints, chemicals and oil marketing companies.

Source:

• Exchanges