Indian Shares Set To Follow Global Peers Lower

(RTTNews) - Indian shares may follow global peers lower on Thursday as the Middle East conflict showed no signs of easing.

There has been as escalating in fighting between Saudi Arabia and the Houthis in Yemen, fueling concerns about further disruptions to energy supplies.

U.S. President Donald Trump said oil prices that spiked because of the Iran war are unlikely to come down until after the U.S. midterm elections.

It is feared that rising oil prices will fan inflation and add to pressure on the U.S. Federal Reserve to raise interest rates.

After last Friday's robust August U.S. jobs report, markets now put the odds of a Federal Reserve rate hike on September 16 at about 60 percent, but the decision largely hinges on upcoming CPI and PPI inflation data.

The producer price index for August is due later today, followed by the consumer price index on Friday. As energy costs climb, the European Central Bank (ECB) is all but certain to raise interest rates by 25 basis points later today.

Benchmark indexes Sensex and Nifty fell 1.1 percent and 0.9 percent, respectively on Wednesday to extend losses for a third consecutive session. Information technology stocks led losses after Cognizant's U.S. immigration practices came under fresh scrutiny.

The rupee plunged 34 paise to close at 95.08 against the dollar on concerns over inflation and forex outflows after escalating Middle East hostilities sent Brent crude prices above $100 a barrel.

Foreign institutional investors (FIIs) net sold shares worth Rs. 582.99 crore on Wednesday while domestic institutional investors (DIIs) net bought shares to the extent of Rs. 1,509.04 crore, according to provisional exchange data.

Asian markets were deep in the red this morning due to concerns over rising oil prices and bond yields.

The dollar index was little changed, and gold was a tad higher at $4,414 an ounce while Brent crude futures held firm above $101 a barrel, hovering at their highest level since May.

U.S. stocks ended lower for a third consecutive session overnight as surging oil prices and higher bond yields clouded the outlook for inflation and interest rates.

U.S. crude oil futures soared almost 4 percent while Brent crude prices topped $100 a barrel for the first time since July after the U.S. and Iran attacked tankers in the Gulf region and Yemen's Houthis hit oil facilities in Saudi Arabia.

President Donald Trump said the doesn't think the Iran war will end until after November's midterm elections, adding that the U.S. is not looking to restart negotiations and that Tehran "can't hold out any longer."

Trump also said that recent U.S. strikes in Strait of Hormuz have incapacitated nine Iranian tankers and more attacks could follow.

Meanwhile, the yield on the benchmark 10-year Treasury note surged to 4.857 percent, the highest since November 2023, after the Treasury Department said it would triple the size of its individual long-dated Treasury buyback operations to $6 billion, which investors deemed insufficient.

The Dow dipped 0.8 percent to reach its lowest closing level in over a month while the S&P 500 gave up half a percent and the tech-heavy Nasdaq Composite shed 0.6 percent.

European stocks hit over one-month lows on Wednesday, with rising Middle East tensions and hawkish rate bets keeping investors' risk appetite in check.

The pan-European STOXX 600 fell 1.4 percent. The German DAX tumbled 1.7 percent, France's CAC 40 slumped 1.9 percent and the U.K.'s FTSE 100 lost 1.3 percent.