Indian shares to open near six-month lows as oil prices rise

Indian equities are expected to open near six-month lows on Tuesday, following a dip to near six-month lows the previous day, as oil prices continue to climb due to ongoing Middle East supply concerns stemming from the US-Iran conflict. Brent crude futures increased by 1.34% to $106.7 per barrel. Higher oil prices pose a challenge for India, the world's third-largest importer of the commodity, as they could fuel inflation, heighten import expenditures, and impede growth and corporate margins.

As of 7:51 a.m. IST, the GIFT Nifty futures were trading at 22,819.5 points, suggesting a subdued start for the Nifty 50 index, which concluded at 22,780.25 on Monday. Ajit Mishra, senior vice president of research at Religare Broking, noted that global macroeconomic uncertainties have exacerbated market pressure, with the surge in Brent crude, persistent foreign selling, and elevated US Treasury yields being the primary culprits, driving risk-averse sentiment.

Foreign institutional investors sold shares worth 53.53 billion rupees (approximately $558 million) on Monday, marking a four-week peak. However, domestic institutional investors made purchases worth 51.89 billion rupees, according to preliminary exchange data. Adani and Tata firms are under scrutiny. Adani group companies will be under the microscope following the Indian market regulator's dismissal of proceedings against the group chairman, Gautam Adani, and four group companies regarding public-float violations.

The case revolved around whether Adani firms adhered to the 25% minimum public-shareholding norm and appropriately disclosed promoter-linked holdings. The Securities and Exchange Board of India imposed fines of Rs 2 million each on two individuals implicated in the case for making false disclosures. Tata group companies are also under observation after Tata Trusts proposed consolidating two group companies with Tata Sons to avert listing driven by India's central bank.