Indian stock markets are likely to begin Thursday’s session on a cautious note, with GIFT Nifty trading at 23,885, indicating a weak opening for the benchmark Nifty 50.
The subdued signal comes after Indian equity markets witnessed their biggest single-day decline in 10 trading sessions on Wednesday, as investors reacted to a combination of surging crude oil prices, escalating geopolitical tensions involving Iran, and fresh tariff announcements from the United States.
The sharp sell-off erased nearly Rs 4.2 lakh crore in investor wealth, according to BSE data, highlighting the growing nervousness in the markets.
Sensex, Nifty Extend Losing Streak
Both benchmark indices ended lower for the third consecutive trading session.
The Nifty 50 closed at 23,996.25, falling 191.45 points, or 0.79%, while the BSE Sensex settled at 76,755.05, down 715.06 points, or 0.92%.
The decline reflected broad-based selling across sectors as investors turned cautious amid mounting global uncertainties.
Crude Oil Rally Triggers Inflation Concerns
A major factor behind Wednesday’s market weakness was the sharp rise in global crude oil prices.
Brent crude for September delivery climbed 2% to $95.99 per barrel, while U.S. West Texas Intermediate (WTI) crude gained nearly 1.7% to $88.27 per barrel.
Oil prices surged after renewed hostilities in the Middle East raised concerns about potential disruptions to global energy supplies.
The rally followed reports that a commercial tanker was hit by an unidentified projectile around 70 nautical miles southwest of Al Shuqaiq. According to the United Kingdom Maritime Trade Operations (UKMTO), the strike triggered a fire onboard the vessel, although no injuries were reported.
The renewed geopolitical tensions have heightened fears that prolonged instability in the region could further tighten global oil supplies and keep energy prices elevated.
Higher Oil Prices Cloud Inflation And Rate Cut Outlook
The latest spike in crude prices has prompted investors to reassess global inflation expectations.
Persistently higher energy costs could make it more difficult for the U.S. Federal Reserve to begin easing monetary policy, as inflationary pressures may remain elevated despite signs of slowing economic activity.
Market participants are also closely monitoring the ongoing corporate earnings season, looking for insights into business demand and the broader health of the global economy.
Asian Markets Trade Mixed Despite Global Concerns
Despite geopolitical tensions and higher oil prices, most major Asian markets traded in positive territory on Thursday as investors shifted their focus toward upcoming corporate earnings.
- South Korea’s Kospi surged 3.47%.
- Japan’s Nikkei 225 gained 1.22%.
- Australia’s ASX 200 advanced 1.06%.
- China’s Shanghai Composite was marginally lower, slipping 0.01%.
The mixed performance suggests that while investors remain concerned about geopolitical risks, optimism surrounding corporate earnings continues to support sentiment in several regional markets.
Market Outlook
Indian equities are expected to remain volatile in the near term as investors closely track developments in the Middle East, movements in crude oil prices, global central bank expectations and corporate earnings.
With GIFT Nifty pointing to a softer start, traders are likely to remain cautious until there is greater clarity on geopolitical developments and inflation trends.