Indian shares seen opening higher after 3-session drop; oil surge clouds outlook

Indian shares are expected to open on an upward trajectory on Friday, following a three-day decline, though the gains could be short-lived due to a surge in oil prices sparked by heightened tensions in the Middle East. The benchmark Nifty 50 futures stood at 22,830.50 at 7:42 a.m. IST, suggesting a promising start to the trading day for the Nifty 50, which had closed at 22,687.65 the previous day.

Both the Nifty and Sensex indices have recorded a decline of approximately 2% throughout the week, with investor sentiment tempered by a rise in Brent crude oil futures to $113.5 per barrel, fueled by apprehensions about potential further energy disruptions following Houthi attacks on top exporter Saudi Arabia. Hitesh Tailor, a technical research analyst at Choice Broking, stated, "Recent price action indicates that buyers are striving to support lower levels, but sellers continue to materialize on rebounds, maintaining a cautious market bias."

Asian markets commenced their trading session in the red, adversely affected by tech stocks after a decline in Wall Street equities overnight. The Nasdaq suffered a decline of over 2% as Meta shares experienced a nearly 8% drop, following the Facebook parent's announcement of its first cash outflow in over a decade due to AI-related expenditures.

Foreign portfolio investors injected a net of 10.22 billion rupees ($107.79 million) into Indian stocks on Thursday, while domestic institutional investors added a net of 16.14 billion rupees worth of stocks, according to provisional NSE data. Vinod Nair, head of research at Geojit Investments, remarked, "Domestically, the near-term market direction will hinge on quarterly earnings releases, as investors scrutinize management commentary on demand outlooks for the forthcoming quarters."

Colgate-Palmolive India is set to be scrutinized following a rise in its quarterly profit, buoyed by demand for its toothpaste portfolio. Meanwhile, Swiggy aims to expand its quick-commerce business, Instamart, after the company disclosed a larger-than-anticipated loss in the September quarter.