Indian shares set for lower open as oil above $110 revives inflation fears

what happened

Reuters reports that Indian equities are expected to open lower on Thursday, carrying forward losses from the past two sessions. The worsening Middle East conflict has kept Brent above $110 a barrel, raising concerns that consumer prices will climb. GIFT Nifty futures stood at 22,643 at 0225 GMT, signaling a negative start for the Nifty 50, which ended Wednesday at 22,811.35. Brent rose 1.3% to $110.30 after fresh Houthi attacks in Saudi Arabia led Washington to order some diplomats and their relatives to leave US missions in the kingdom.

Members of India's rate-setting committee said further hikes may be needed to contain inflation, yet they stopped short of backing a sharp tightening cycle given risks to growth, according to minutes released Wednesday. Provisional data showed foreign investors were net buyers of Indian stocks worth 10.22 billion rupees, or $108.19 million, on Wednesday.

why it matters

Oil is a key risk for India, which imports most of its energy, since costlier crude can lift inflation, widen the fiscal gap and squeeze company earnings. Attention also centers on the $3.2 billion Jio Platforms IPO, which was oversubscribed within hours of launch on Wednesday as large institutional investors piled in.

market impact

Indian stocks and rupee: costlier oil raises inflation risk and pressures corporate profits

tags

instruments