Stocks fall as oil prices stay high
The Indian stock market is expected to have a weak start on Thursday, with Nifty and Sensex facing a muted session due to raised crude oil prices and geopolitical tensions.
Despite supportive global cues, including softer US inflation and gains across Asian markets, financials and Tata Group stocks remain in focus. According to the report, Gift Nifty points to a slightly weaker start on Thursday, with Indian stocks continuing to waver amid firm crude oil prices.
India’s CPI inflation slightly rose to 4.45% YoY, in line with estimates. Global risk appetite improved after softer-than-expected US inflation data reinforced expectations that the Federal Reserve is likely to keep interest rates unchanged at its September meeting.
Sentiment received an additional boost from strong earnings from AI infrastructure companies, sparking broad-based gains in technology stocks. The improved backdrop is reflected in Japan’s Nikkei 225, which is trading more than 1% higher.
South Korea’s Kospi has advanced over 3%, providing supportive regional cues for Indian markets. However, raised crude oil prices remain a concern, driven by the continuing US-Iran standoff over the Strait of Hormuz.
Ponmudi R, CEO of Enrich Money, said that raised crude oil prices remain the primary overhang for domestic equities and are likely to keep investor sentiment measured.
Meanwhile, Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, noted that although Brent crude has eased modestly to below $89 per barrel, the unresolved situation in the Strait of Hormuz continues to keep the geopolitical risk premium in energy markets raised.
Domestically, Tata Group stocks are likely to remain in focus following the resignation of the group’s chairman, while Bank Nifty’s outperformance yesterday suggests financials could lead any market recovery.
The Reserve Bank of India is expected to maintain status quo throughout CY26E, with the possibility of a 25bps rate hike in Q1CY27E.
The timing of the rate hike is important, and the market will be influenced by this decision. The Indian stock market will likely continue to be influenced by global cues, including the US inflation data and the Federal Reserve’s decisions.
With the Strait of Hormuz situation still unresolved, crude oil prices are expected to remain volatile, affecting the market sentiment. This volatility will be a key factor in the market’s performance.
Inflation data is a key factor, and the market will be watching the US inflation data closely.
