Indian Shares Decline At Pre-Open As Benchmarks Stare At Shaky Start Amid Oil Boil

Mumbai, July 14: Indian shares declined at pre–open on Tuesday signalling a lower start for benchmarks as crude oil prices raced to a one month high amid rising Middle East hostilities.  

Nifty 50 declined 0.5% and Sensex fell 0.4% at pre–open while Gift Nifty went down 0.7%. 

To be sure, both the benchmarks had ended flat yesterday. Also, India’s retail inflation unexpectedly breached the Reserve Bank of India’s target band in June, marking its first such breach in 17 months and bolstering expectations of interest rate hikes. 

Spotlight will fall on HCLTech which reported June-quarter earnings that topped Street estimates on both profit and revenue. However, the IT major retained its FY27 guidance, signalling a cautious demand outlook and suggesting growth could remain subdued over the coming quarters. ICICI Prudential Asset Management posted a 23% year-on-year rise in its June-quarter net profit, reflecting healthy growth in its asset management business. 

As for global cues, Asian equities traded sharply lower as investors assessed the fallout from intensifying tensions between the US and Iran and their potential impact on global growth and inflation. 

Japan’s Nikkei slipped 0.8%, while South Korea’s benchmark index declined 1.5%. MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 2.3%, reflecting widespread risk aversion across the region. US equity futures also pointed lower during Asian trading hours, indicating that bearish sentiment could persist through global markets. 

The latest bout of volatility followed US President Donald Trump’s decision to tighten pressure on Iran by announcing a blockade on Iranian shipping and proposing levies on cargo passing through the Strait of Hormuz, fuelling concerns over disruptions to one of the world’s most important energy supply routes. 

Crude oil prices extended Monday’s gains, with Brent crude hovering around the $85-a-barrel mark, its highest level in a month, as traders priced in the possibility of supply disruptions from the Gulf. 

The surge in oil prices is particularly significant for India, a major crude importer. Sustained higher oil prices could stoke inflation, widen the current account deficit and put pressure on the rupee. Investors are likely to keep a close watch on oil marketing companies, aviation stocks and other fuel-intensive sectors, while upstream oil and gas producers could benefit from firmer crude prices. 

The rally in crude also pushed US Treasury yields higher as investors reassessed the outlook for inflation and interest rates. Market participants are now focused on the US Consumer Price Index (CPI) data due later in the day, which could shape expectations around the Federal Reserve’s monetary policy path. 

US stocks retreated on Monday as renewed geopolitical concerns sparked a broad-based risk-off move across financial markets. 

The S&P 500 fell 0.79%, the Nasdaq Composite declined 1.55%, while the Dow Jones Industrial Average lost 0.26%. Technology and semiconductor stocks bore the brunt of the selling as rising bond yields and higher energy prices dampened investor appetite for risk. 

 The uncertainty also prompted investors to seek refuge in safe-haven assets, lifting the US dollar and posing fresh challenges for emerging-market currencies and foreign portfolio flows. 

European equities ended largely flat on Monday as investors digested the implications of the renewed US-Iran tensions. 

While gains in energy stocks, supported by the sharp rise in crude prices, helped limit losses, broader market sentiment remained subdued amid concerns that elevated oil prices and geopolitical uncertainty could weigh on economic growth. 

Source

• Exchanges