Pre-Open Points To Negative Start For Sensex, Nifty As Oil Boils On Middle East War

Mumbai, July 23: Indian shares fell at pre open signalling a lower start for benchmarks as oil recorded a sharp rise amid the escalating and widening war in the Middle East. 

Nifty 50 declined 0.4% and Sensex went down 0.3% while Gift Nifty declined 0.6%. 

Both benchmarks had seen a selloff yesterday as oil and Middle East remained on the boil.  

With risk appetite still subdued, stock-specific volatility is expected to remain high as investors react to a mixed batch of quarterly earnings.  

IndusInd Bank could see buying interest after the private-sector lender posted a stronger-than-expected quarterly profit, aided by a decline in provisions. 

Dr Reddy’s Laboratories may face selling pressure after the drugmaker fell short of profit estimates and flagged supply constraints for semaglutide.  

Hindustan Petroleum could also remain in focus after the state-run refiner reported its first quarterly loss since 2022, hit by a surge in crude oil prices.  

Among other Nifty companies, Cipla, Infosys and InterGlobe Aviation are scheduled to announce their results later on Thursday, potentially setting the tone for their respective sectors. 

Asian Markets Advance On Tech Optimism 

Asian equities rose in early trade, led by technology and semiconductor stocks, as strong spending plans from U.S. technology companies reinforced expectations of sustained demand for artificial intelligence infrastructure. 

South Korea’s KOSPI jumped 2.3%, while Japan’s Nikkei gained 0.5%. MSCI’s broadest index of Asia-Pacific shares outside Japan rose about 1%. 

The gains in Asia came despite a subdued session on Wall Street, where investors remained cautious ahead of a fresh batch of Big Tech earnings. The technology-heavy Nasdaq Composite fell 0.57%, while the S&P 500 slipped 0.14% on Wednesday. The Dow Jones Industrial Average ended almost flat. 

Wall Street Slips As Investors Await Big Tech Earnings 

U.S. equities struggled for direction as investors turned cautious ahead of results from major technology companies, which are expected to offer fresh clues on whether heavy investment in artificial intelligence can continue to justify lofty valuations. 

Technology stocks came under pressure, although optimism around corporate spending on AI infrastructure remained intact. 

The continued expansion of AI and cloud infrastructure spending by global technology companies could also support sentiment towards Indian stocks with exposure to AI-related themes. 

European Shares Rise As Energy, Defence Stocks Gain 

European equities ended higher on Wednesday, with the STOXX 600 gaining 0.6% to hit a two-week high, as gains in energy, aerospace and defence stocks offset weakness in technology shares. 

Energy stocks benefited from higher crude prices, while aerospace and defence companies drew support from heightened geopolitical tensions in the Middle East. Technology stocks declined ahead of major U.S. technology earnings, but their weakness was more than offset by gains in other sectors. 

Oil Surge Raises Inflation, Rate Concerns 

The biggest risk to the domestic market’s opening is a sharp rise in crude oil prices. 

Brent crude climbed about 2% to around $96 a barrel, its highest level in six weeks, as escalating U.S.-Iran tensions and disruptions to energy shipping routes fuelled concerns over tighter global supplies. 

Higher oil prices are particularly significant for India, one of the world’s largest crude importers. A sustained rise could put pressure on inflation, the trade deficit and the rupee, while also squeezing margins for oil-sensitive companies. 

The surge in crude has also revived concerns over global inflation and the outlook for interest rates. Short-term U.S. Treasury yields rose to multi-month highs as investors assessed the possibility that persistent energy price pressures could make central banks more cautious about easing monetary policy. 

Source

• Exchanges