Indian Shares Set For Gap-down Opening As Oil Extends Surge

(RTTNews) - Indian shares may tumble at open on Monday as investors assess the wider economic effects of the conflict in the Middle East.

U.S. President Donald Trump underscored that indirect negotiations with Iran via Pakistan are progressing smoothly and a deal could be made "fairly quickly," according to the Financial Times.

At the same time, he has made fresh threats, saying he would love to "take the oil in Iran" and the U.S. could take Kharg Island, Iran's oil export hub, "fairly easily."

Media reports suggest that the Pentagon is preparing for weeks of ground operations in Iran. Any potential operations would likely be more like extensive raids vs. a full-scale invasion, according to a Washington Post report.

Yemen's Houthis have entered the conflict Saturday, threatening crucial Red Sea shipping routes. The Saudi Arabian port of Yanbu, which remains effectively closed by the war is well within the range of Houthi missiles.

The United Arab Emirates (UAE) said a number of people had been injured in an Iranian strike on a key aluminum plant in Abu Dhabi.

Kuwait's Ministry of Electricity has reported that the service building in one of its power stations and water desalination plants was damaged due to an Iranian attack on the State of Kuwait.

Asian markets were deep in the red this morning on concerns that a prolonged Middle East conflict could bring a spike in inflation and trigger a mild recession in many developed countries.

The U.S. dollar was broadly steady while Brent crude futures surged nearly 4 percent to $116.46 a barrel, bringing its gains for March to 60 per cent - topping the jump that followed Iraq's invasion of Kuwait in 1990. WTI crude futures were up more than 3 percent at $102.78, making for a monthly rise of 53 percent.

Spot gold was down half a percent at $4,471 an ounce after rising on Friday on dip-buying.

U.S. stocks tumbled on Friday, with all three major indexes marking their fifth consecutive weekly decline to hit their lowest closing levels in over eight months, as the surge in oil prices along with other products such as fertilizer as a result of the Iran war fanned inflation and growth fears.

A measure of U.S. consumer sentiment eased to a three-month low in March, and one-year consumer inflation expectations jumped to 3.8 percent, raising concerns about the economic outlook.

Philadelphia Fed President Anna Paulson said the Iran war has created new risks to both inflation and growth without specifying what it meant for monetary policy in the near term.

The tech-heavy Nasdaq Composite slumped 2.2 percent while the Dow and the S&P 500 both plunged by 1.7 percent, as Brent crude prices jumped back above $110 a barrel despite U.S. pause on energy strikes until April 6th.

European stocks fell on Friday to extend losses from the previous session amid a lack of progress in bringing an end to the four-week-old Middle East conflict.

The pan European Stoxx 600 gave up 1 percent. The German DAX lost 1.4 percent, France's CAC 40 shed 0.9 percent and the U.K.'s FTSE 100 finished marginally lower.