Indian shares likely to rebound after recent slide; higher oil prices to cap upside

Indian shares are likely to stage a partial rebound at the open on Thursday, after three consecutive sessions of losses, though the recovery is likely to ​remain fragile due to elevated oil prices and renewed Middle East ‌tensions. GIFT Nifty futures were at 24, 094 points as of 8: 00 a. m. IST, indicating a positive start for the Nifty 50 index, which closed at 23, 914. 45 on Wednesday. The Nifty and the Sensex have ​each fallen about 1% over the past three sessions, pressured by climbing ​crude prices and a rise in global bond yields as investors ⁠reassessed the prospect of interest rates staying higher for longer. “While investor sentiment has deteriorated ​after escalating tensions in the Middle East, the sharp decline has pushed the benchmarks ​closer to downside targets, with Nifty likely to find resistance near 24, 000 levels, ” said Ajit Mishra, senior vice president of research at Religare Broking. Brent crude was little changed on Thursday, after US ​President Donald Trump said the latest attacks on Iran would be short-lived, raising ​hopes of renewed Middle East hostilities easing. However, Brent traded at an elevated $96 per barrel, with ‌markets assessing ⁠the impact of the renewed hostilities on energy supplies. Persistently high oil prices are a particular concern for India, a major crude importer, as they can worsen inflation and strain the current account. Other Asian markets opened higher, ahead of the crucial US ​payrolls report that could ​influence the future ⁠rate trajectory, while comments from Federal Reserve Bank of New York President John Williams tempered expectations of a hike this month. Foreign ​institutional investors’ inflows in Indian markets stood at 66. 88 billion ​rupees on ⁠Wednesday, while domestic institutional investors purchased shares worth 28. 13 billion rupees, according to NSE’s provisional data.

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