Indian shares may open higher, elevated crude prices to weigh

Indian shares may open marginally higher on Wednesday, buoyed by positive earnings and foreign buying, as investors cautiously await US inflation data. The Nifty futures were trading at 24,553 points, suggesting a bright start for the Nifty 50, which closed at 24,471.7 on Tuesday. However, the Nifty 50 and the BSE Sensex suffered a 0.5% decline each on Tuesday due to concerns over soaring crude oil prices.

Oil prices continued to climb, and Wall Street closed lower on Tuesday as traders' optimism about a potential Middle East stability deal waned. Simultaneously, the United States and Iran-aligned Houthis reported separate attacks on shipping, casting further doubts on the prospects of ending the Iran war. Investors are eagerly anticipating US consumer and producer inflation data this week, which could impact the Federal Reserve's future rate decisions.

Earlier this week, weaker-than-expected jobs data had already prompted investors to reduce expectations of a near-term Fed rate hike. With weaker US interest rates, emerging markets like India become more appealing to foreign investors as the dollar weakens and Treasury yields drop. On Tuesday, foreign investors purchased shares worth 2.59 billion rupees ($27.14 million), marking their ninth consecutive session of net buying in the past ten trading days. This demonstrates the resurgence of foreign investment after a record selloff earlier this year.