Indian shares set for muted start as Middle East risks weigh

Indian shares are anticipated to commence the trading day on Friday with minimal change, as the likelihood of a Federal Reserve rate increase in September diminishes, balancing worries over ongoing Middle East tensions. As of 7:30 a.m. IST, Nifty futures were trading at 24,428 points, suggesting a subdued opening for the Nifty 50, which finished at 24,395.85 on Thursday.

The Nifty 50 and BSE Sensex have declined by 0.7% and 0.5% this week, as growing tensions in the Middle East have overshadowed a robust earnings season and the expectation that the Fed will maintain interest rates for the near future. The United States indicated on Thursday that it might sustain a naval embargo on Iran indefinitely and intensify economic pressure on Tehran while negotiations for a ceasefire remain unsuccessful.

However, Brent crude futures fell to $87 per barrel due to increased inventories and reduced global demand expectations, which counterbalanced geopolitical concerns. Foreign investors withdrew a total of 5.11 billion rupees ($53.54 million) worth of Indian shares on Thursday, marking their third consecutive day of selling. This trend was further influenced by unchanged U.S. producer price data for July, which dampened expectations of a Federal Reserve rate hike in the coming month.