Indian Shares Set To Drift Lower As Oil Prices Jump After Trump's Prime Time Speech

(RTTNews) - Indian shares look set to open sharply lower on Thursday as U.S. President Donald Trump's address to the nation on the war in the Middle East damped hopes for a swift resolution to the conflict.

Benchmark indexes Sensex and Nifty jumped 1.7 percent and 1.6 percent, respectively on Wednesday, recovering from their steepest drop in six years in March on signs of easing Middle East tensions.

The debt and forex markets remained closed on Wednesday for a local holiday. Intensifying its crackdown on speculative activity in rupee, the RBI on Wednesday announced more actions focused on authorized dealers.

After putting a limit of $100 million on net open rupee positions of banks earlier, the central bank has come up with another notification, refraining banks from offering rupee non-deliverable forwards to resident and non-resident clients. Also, it was said that companies cannot rebook cancelled forward contracts.

Foreign investors net sold shares worth Rs 8,331 crore on Wednesday, while domestic institutional investors net bought shares to the extent of Rs 7,172 crore, ad per provisional exchange data.

Asian markets reversed course to edge lower this morning, the dollar advanced, bond yields surged and oil prices jumped more than 5 percent as Trump's highly anticipated speech provided little clarity on when the conflict might end. Gold prices were down nearly 1.5 percent at $4,689 per ounce.

Trump said the U.S. military goals were "nearing completion," and that Iran would be hit "extremely hard over the next two to three weeks," without giving details as to when the conflict would end.

He claimed the drawbacks were short-term, and urged Americans to see the conflict as an "investment".

Meanwhile, Iranian President Masoud Pezeshkian has penned an open letter to the people of the United States, asserting that Iran harbors "no enmity" toward ordinary Americans and warning that continued confrontation between the two countries is "more costly and futile than ever before."

Overnight, U.S. stocks ended mostly higher to extend the previous session's rally on optimism that the Iran war may end soon.

President Trump claimed on Wednesday that Iran's "New Regime President" had asked Washington for a ceasefire and the U.S. would consider the offer once the Strait of Hormuz open is "open, free, and clear."

"Until then, we are blasting Iran into oblivion or, as they say, back to the Stone Ages, where they belong!!" Trump said.

The latest remarks came after Iran's Revolutionary Guard warned a number of U.S. tech companies with Middle East operations that they'll be considered "legitimate targets."

Meanwhile, Tehran said Trump's statement on requesting a ceasefire was false and baseless.

On the data front, U.S. retail sales increased by the most in seven months in February, while private sector employment increased by 62000 jobs in March with annual pay rising 4.5 percent year-over-year, separate reports showed.

The tech-heavy Nasdaq Composite gained 1.2 percent, the S&P 500 added 0.7 percent and the Dow rose half a percent.

European stocks closed on a buoyant note on Wednesday as investors reacted to Trump's mixed messages on ending the war with Iran, regional PMI data and a slew of corporate updates.

The pan-European Stoxx Europe 600 index soared 2.5 percent after Trump said the previous day that the war may be over in 2-3 weeks sans a deal to reopen the Strait of Hormuz.

The German DAX rallied 2.7 percent, France's CAC 40 surged 2.1 percent and the U.K.'s FTSE 100 climbed 1.9 percent.