Indian Shares Headed For Cautious Opening As Oil Nears $100
(RTTNews) – Indian shares are seen opening lower on Wednesday as investors fret over persistently high oil prices and escalating Middle East hostilities.
Brent crude prices rose toward $100 a barrel as renewed tensions in the Gulf region raised concerns about further disruptions to global oil supplies.
Iran has launched a barrage of missiles targeting U.S. military positions in Jordan and warned all tanker crews in Bahraini and Kuwaiti to “immediately abandon their vessels”, whether at anchor or at berth in ports, after the U.S. destroyed five Iranian tankers in the Gulf of Oman and near Kharg Island, a major crude export hub.
A U.S. official said the strikes came in response to alleged attempts by Iran to target a U.S. warship with ballistic missiles twice over two days.
Rising global bond yields may also keep investors on edge ahead of crucial U.S. inflation data due this week, which could influence expectations regarding a potential Fed rate increase at its September 15-16 meeting.
Benchmark indexes Sensex and Nifty fell 0.7 percent and 0.6 percent, respectively on Tuesday amid concerns that rising energy prices may result in higher input costs and inflationary pressures for several Indian companies.
The rupee dropped 33 paise to close at Rs. 94.82 against the dollar, logging its biggest single-day decline in nearly two months on concerns about rising oil prices amid escalating tensions in West Asia.
Foreign institutional investors turned net sellers and offloaded shares worth Rs 123.19 crore on a net basis on Tuesday, while domestic institutional investors net bought shares to the extent of Rs 1,349.64 crore, according to provisional exchange data.
Asian stocks were mixed this morning, with Japanese and Seoul markets advancing as chip stocks extended their recent gains on sustained investor interest in the artificial-intelligence trade.
The U.S. dollar wobbled in Asian trade while gold edged up around half a percent to $4,373 an ounce after falling for three straight sessions.
U.S. stocks closed lower overnight as traders returned from the Labor Day holiday. The Dow tumbled 1.2 percent, the S&P 500 shed 0.6 percent and the tech-heavy Nasdaq Composite dropped 0.3 percent as higher energy prices and rising bond yields clouded the outlook for inflation and the Federal Reserve’s rate path.
Renewed trade tensions between the U.S. and Canada also weighed on sentiment as Canada matched U.S. tariffs ‘dollar-for-dollar’, impacting 700 products and multiple industries.
European stocks ended on a muted note on Tuesday amid rate-hike worries and political uncertainty in Germany.
The pan-European STOXX 600 finished marginally lower. The German DAX ended little changed and France’s CAC 40 edged up 0.1 percent while the U.K.’s FTSE 100 edged down marginally.
