Indian Shares Set For Weak Opening As Oil Extends Surge On Mideast Tensions

(RTTNews) - Indian shares are seen opening notably lower on Friday as investors fret about the inflationary impact of elevated crude prices amid escalating geopolitical concerns.

Brent crude futures rose toward $108 a barrel, after surging 5.9 percent on Thursday, WTI crude futures rose toward $103 a barrel after climbing 6.7 percent in the previous session.

Both benchmarks recorded their highest closes since May 19 on Thursday, heightening concerns over India's import bill, inflation and corporate earnings.

On Thursday, benchmark indexes Sensex and Nifty both reversed early losses to end up around 0.2 percent, snapping a three-day losing streak.

The rupee slumped 44 paise to close at 95.52 against the dollar on mounting concerns over the country's import cost trajectory.

Foreign institutional investors net sold shares worth Rs 438.24 crore on Thursday while domestic institutional investors net bought shares to the extent of Rs 1,025.85 crore, according to provisional exchange data.

Asian markets were deep in the red this morning, with benchmark indexes in Japan and South Korea falling 2-3 percent, following a fourth straight session of losses on Wall Street.

The dollar index held gains ahead of the all-important U.S. CPI inflation data later in the day, which could influence the Federal Reserve's rate trajectory.

Gold edged up slightly to 4,325 an ounce but held near a one-week low ahead of the Federal Reserve's policy meeting next week.

U.S. stocks ended lower for a fourth consecutive session overnight as oil prices climbed further and the yield on the 10-year Treasury note rose above 4.95 percent to its highest level in almost three years on fears of prolonged disruptions to global energy supplies.

Adding to investor anxiety, President Donald Trump said he doesn't think the Iran war will end until after November's midterm elections and that oil prices will not come down until then.

The Wall Street Journal reported, citing U.S. officials that the conflict could drag on through the remainder of his term, which ends in January 2029.

Mixed producer inflation data also weighed on markets. While producer prices increased in line with economist estimates on a monthly basis in August, the annual rate of price growth came in at 5.4 percent, accelerating from July's revised 4.8 percent and surpassing market expectations for 5.1 percent growth.

The Dow and the S&P 500 both dropped around 0.6 percent to reach their lowest closing levels in over a month while the tech-heavy Nasdaq Composite fell 0.7 percent.

European stocks hit two-month lows on Thursday as the European Central Bank raised interest rates for the second time this year and warned that inflation is set to remain well above target for an extended period.

The pan-European STOXX 600 fell 0.7 percent. The German DAX dipped 0.8 percent, France's CAC 40 shed half a percent and the U.K.'s FTSE 100 declined 0.6 percent.