Indian Shares Expected to Open Lower Amid Global Turbulence
On Monday, Indian stock markets are likely to begin the day on a low note, following a significant selloff in Asian markets. This downturn comes in response to rising crude oil prices, ongoing tensions in the Middle East, and increasing concerns about a possible interest rate hike in the U.S.
The GIFT Nifty futures indicated that the Nifty 50 could open about 1% lower, starting around 23,138 points, compared to its previous close of 23,366.70.
Brent crude oil prices jumped by 3.5% to reach $96.50 per barrel. This surge follows Iran’s missile attacks on Israel after Israeli strikes on Beirut, leading to fears of further conflict and disruptions in oil supply.
U.S. President Donald Trump stated he would advise Israeli Prime Minister Benjamin Netanyahu against retaliation, despite promises of further action from Hezbollah and Tehran. Israel has warned it may intensify its military response if provoked.
The broader MSCI Asia ex-Japan index plunged by 3.4%, with South Korea’s KOSPI dropping 6.9% and Japan’s Nikkei losing 4.4%. The declines in these markets were significantly influenced by a downturn in AI-related stocks following a recent rally.
In the U.S., equity markets also dipped on Friday. This followed a stronger-than-anticipated jobs report for May, which increased expectations for a Federal Reserve interest rate hike. The likelihood of a rate increase by December 2026 rose to 72.3%, up from 45.2% just a week earlier, according to CME FedWatch.
Higher interest rates in the U.S. usually make emerging markets like India less attractive to investors. So far this year, foreign portfolio investors have withdrawn $28.63 billion from Indian equities, surpassing last year’s record outflow amid worries over high crude prices, the impact of the Iran conflict, and India’s limited exposure to pure-play AI firms.
The Reserve Bank of India decided to keep its benchmark interest rate steady on Friday while announcing measures to encourage foreign investments and support the Indian rupee. The bank also raised its inflation forecast for the fiscal year 2027 from 4.6% to 5.1%, while lowering its economic growth estimate from 6.9% to 6.6%. However, data released after market hours showed a resilient growth rate of 7.8% in the March quarter, supported by robust domestic demand.
Stocks to Keep an Eye On:
- Nesco is set to return all four sites on the Raipur-Visakhapatnam Expressway due to operational challenges.
- TVS Motor announced that its HLX motorcycle series has surpassed 5 million in global sales.
- Reports indicate that Airbus has delayed XLR deliveries to Interglobe Aviation due to supply chain issues caused by the ongoing conflict.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Subhranshu Sahu)
