Indian Shares To Open On Cautious Note Amid Rising US-Iran Tensions

(RTTNews) - Indian shares are seen opening flat to slightly lower on Thursday as crude oil prices remain elevated amid unease in West Asia.

Amid continued conflict, missile strikes, and diplomatic efforts surrounding Iran, U.S. President Donald Trump said Teheran will be "defeated soon".

Benchmark indexes Sensex and Nifty pared early gains to end marginally higher on Wednesday.

The rupee slipped 5 paise to close at 96.26 against the U.S. dollar despite mild central bank intervention.

Foreign institutional investors extended their selling streak to a third consecutive session and net sold shares worth Rs. 735.83 crore on Wednesday, while domestic institutional investors net bought shares to the extent of Rs. 704.93 crore, according to provisional exchange data.

Asian markets were broadly lower this morning as chip stocks sold off ahead of TSMC's earnings.

Japan's Nikkei fell nearly 3 percent and South Korea's Kospi was down almost 7 percent, while losses remained modest elsewhere in the region as another benign reading on U.S. inflation supported bonds and lessened the risk of an imminent rate hike from the Federal Reserve this month.

The U.S. dollar was broadly lower, and gold slipped to $4,033 an ounce while Brent crude futures held firm above $85 a barrel after reports emerged that U.S. President Donald Trump is leading toward further expanding U.S. military operations in Iran, including sending ground forces and the possible seizure of Kharg Island, Iran's primary oil export terminal.

After the U.S. executed daylight airstrikes killing at least seven Iranian troops, Iran's top negotiator, Mohammed Bagher Ghalibaf, has declared that the county's armed forces have "complete freedom of action" against the "enemy's aggression".

Iran is fighting an "existential war" against the United States as Washington pursues objectives that extend beyond changing Iran's government, Ghalibaf said.

Overnight, U.S. stocks fluctuated before closing mostly higher, the dollar weakened and bond yields dipped as softer-than-expected producer price data bolstered the view that the Federal Reserve can remain patient on interest rates.

Data showed the producer prices index for final demand unexpectedly dropped 0.3 percent last month after a downwardly revised 0.6 percent increase in May.

Federal Reserve Bank of New York President John Williams said that inflation may have peaked and should begin easing but remains "unquestionably too high".

In geopolitical news, the United States launched a new wave of strikes against Iran after reimposing a naval blockade of all Iranian ports.

The tech-heavy Nasdaq Composite gained 0.6 percent, the S&P 500 added 0.4 percent and the Dow rose 0.3 percent.

European stocks ended mixed on Wednesday as traders retreated from rate-hike bets and reacted to weak GDP data from China. The pan-European STOXX 600 inched up 0.1 percent.

While France's CAC 40 edged up 0.2 percent, the U.K.'s FTSE 100 slipped 0.1 percent and the German DAX shed 0.6 percent.