Indian Markets Set for Recovery on Energy Supply Hopes
Indian stocks are set to rise after a sharp weekly drop as energy supply hopes grow. Diplomatic efforts and ship escorts offer relief amid regional tension.
India stock benchmarks are expected to open higher on Monday, as investors look for a rebound following the market's sharpest weekly decline in years. This potential recovery is supported by hopes of easing energy supply concerns, which have provided a measure of relief to markets previously rattled by geopolitical instability. GIFT Nifty futures were trading at 23,257, suggesting the Nifty 50 will open above Friday's close of 23,151.10.
Market sentiment saw an improvement following reports that the United States is preparing to announce a coalition to escort vessels through the Strait of Hormuz, a vital chokepoint for global oil supply. Further stability was provided by the safe passage of two Indian-flagged liquefied petroleum gas carriers through the strait last week, easing immediate fears of supply chain disruptions. India's foreign minister Subrahmanyam Jaishankar recently discussed the regional situation and his engagement with Iran in an interview published on Sunday.
He was engaged in discussions with Iran and that talking has yielded some results.
Despite these diplomatic efforts, the market remains on edge as the conflict between Israel and Iran continues to keep oil prices above $100 per barrel. This ongoing volatility has fueled inflation concerns and pushed the Indian rupee to record lows. Last week, the Nifty fell 5.3% and the Sensex lost 5.5%, marking their worst weekly performances since mid-2022 and 2020, respectively. Broader Asian markets also showed weakness, falling 0.3% in early trade.
On the corporate front, several companies are under observation. Seamec Limited has announced it secured a 4.11 billion rupee operations and maintenance contract from ONGC. Meanwhile, Hindalco Industries Limited has reportedly halted the production of extruded aluminium products, citing the impact of the regional war. Additionally, GMR Airports has won a bid to upgrade Cargo terminal 1 at Delhi airport, and Salasar Techno Engineering reported that its operations have been affected by disruptions in the supply of liquefied petroleum gas.
