Indian shares extend losing run on fading hopes of Mideast peace deal
Indian share benchmarks extended their losing streak on Tuesday, as fading hopes of an imminent end to the Iran war kept crude oil prices elevated, stoking inflation concerns globally and triggering a selloff in bonds. Iran threatened a “fully offensive” military posture as efforts to negotiate a permanent end to the war with the U.S. have stalled, a senior Iranian official told Reuters on…
Indian share markets continued their downward trend on Tuesday, as diminishing expectations of a swift conclusion to the Iran conflict kept crude oil prices high, amplifying global inflation concerns and leading to a decline in bond prices. Iran signaled its readiness to adopt a "fully offensive" military stance, as talks aimed at reaching a permanent peace settlement with the U.S. hit a dead-end, according to a senior Iranian official speaking to Reuters on Monday.
Meanwhile, the United States affirmed that it would not extend the temporary ceasefire, which has now lapsed.
The Nifty 50 index slipped 0.55% to 24,154.9 levels, while the BSE Sensex dropped 0.63% to 77,235.46. This marked Nifty's sixth consecutive day of losses, with the Sensex recording five losses in its last six sessions. Out of the 16 major sectors represented, twelve experienced declines. The broader and largely influenced by domestic demand small-cap segment ended the day unchanged, whereas mid-cap stocks witnessed a 0.4% decrease.
Brent crude oil prices settled around $91 per barrel, up approximately 9% in a fortnight. Persistent higher crude prices could reignite inflation worries for India, the world's third-largest oil importer. "Market sentiment remains volatile given the Middle East crisis's spillover into bond yields, particularly in the United States," stated Pankaj Pandey, head of retail research at ICICI Securities.
Elevated Treasury yields render India and other emerging economies less appealing to foreign investors, who have already offloaded a record $25 billion worth of local shares this year.
Global equities faced their own set of setbacks, with major indices such as MSCI's Asia Pacific share index outside Japan and Europe's STOXX 600 both experiencing losses. Within the tech sector, which accounts for a significant portion of its revenue from the U.S., the IT index suffered a 1.9% decline, adding to sectoral losses. Notably, Milky Mist made a strong debut on the market, gaining 29.6%.
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