Indian shares to fall as widening Iran conflict sends oil higher

Indian shares are set to open lower on Wednesday, mirroring global downturns, as oil prices surged to a near-six-week high following US and Iranian strikes overnight. The conflict in the Middle East has escalated, heightening worries about inflation and global monetary conditions. Nifty futures were at 24,033.5 points at 7:38 a.m. IST, forecasting a negative start for the Nifty 50 index, which closed at 24,055.8 on Tuesday.

Brent crude prices jumped 2% to $96.6 a barrel, unsettling Asian markets and boosting global bond yields due to concerns over a potential U.S. rate hike. The US asserted it had carried out airstrikes on Iranian targets overnight, sparking a retaliatory response, deepening tensions in the region. Prolonged disruptions to energy supplies could keep oil prices high, perpetuate inflationary pressures, and strengthen the likelihood of tighter global monetary policies, adversely impacting risk assets.

Indian benchmarks Nifty and Sensex have declined 0.5% and 0.4% over the past two days, as global concerns overshadowed positive economic growth data. Gland Pharma will be under scrutiny after the U.S. drug regulator concluded its inspection of the company's Visakhapatnam facilities with no issues found. Coal India plans to sell a 10% stake in Mahanadi Coalfields via its subsidiary's initial public offering, as per draft filings with the market regulator.

Engineering firm EMS is expected to move following securing a $23 million contract. Ujjivan Small Finance Bank shares will be monitored following the bank's CEO stepping down due to health concerns, with the regulator approving executive director Carol Furtado to take over as interim CEO from September 1.