Indian shares are set for a subdued start as rising Brent crude prices and ongoing foreign sell-offs influence investor sentiment, with domestic demand cushioning the market decline amidst geopolitical tensions and inflation concerns.
Indian shares are expected to open little changed on Tuesday as traders weigh renewed worries over oil supply after the temporary US-Iran ceasefire expired and hopes for a quick resolution faded. Brent crude has stayed above $91 a barrel, a level that could revive inflation concerns for India, which relies heavily on imported energy, while sentiment is also being damped by the absence of any clear diplomatic breakthrough. GIFT Nifty futures pointed to a flat start after the Nifty 50 finished Monday at 24,287.65.
The recent rise in crude has added to pressure on domestic equities at a time when the benchmark indices are already under strain. The Nifty 50 has fallen for five straight sessions and the Sensex has dropped in four of the last five, leaving both gauges lower over that stretch. Market participants said the latest move in oil is reinforcing a cautious mood rather than triggering a full-scale risk-off reaction.
Foreign investors have continued to trim exposure to Indian stocks, adding to the drag on the market. According to NSE provisional data cited in the lead report, foreign portfolio investors sold shares worth 25.35 billion rupees on Monday, while domestic institutions bought 51.01 billion rupees worth. Separate market reports have shown that foreign selling has now run for several sessions, even as local funds and retail savings through systematic investment plans continue to provide support.
That split between overseas outflows and domestic demand has become a defining feature of the Indian market this year. GoodReturns reported that foreign holdings in India have slipped to a two-decade low, with investors favouring other markets and reacting to geopolitical tensions and high oil prices. Other market commentary has said domestic buyers have repeatedly cushioned the impact of foreign withdrawals, helping Indian equities avoid deeper declines even during periods of heavy selling.
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