Indian Shares Set To Extend Losses On Trade, Geopolitical Concerns

(RTTNews) - Indian shares look set to open lower on Thursday as the prospect of a quick end to the war in West Asia thinned and trade tensions resurfaced.

The Trump administration has launched a Section 301 probe targeting excess manufacturing capacity in 16 major trading partners, a move aimed at rebuilding tariff pressure after the Supreme Court struck down a key tariff policy.

The investigation could lead to new tariffs against countries including China, the European Union, India, Japan, South Korea and Mexico.

Benchmark indexes Sensex and Nifty slumped by 1.7 percent and 1.6 percent, respectively on Wednesday, with banking, auto and IT stocks coming under heavy selling pressure as oil prices resumed their upward trend amid mixed messages on a resolution to the Middle East conflict.

The rupee weakened 24 paise to breach the 92 mark to a dollar at close, mirroring the slide in domestic equity markets.

Foreign investors net sold shares worth Rs 6,267 crore on Wednesday while domestic institutional investors net bought shares to the extent of Rs 4,966 crore, according to provisional exchange data.

Asian markets were broadly lower this morning as reports of an Iranian blockade impacting global energy shipments overshadowed an announcement by the International Energy Agency (IEA) that it will release a record 400 million barrels of emergency oil reserves to stabilize global markets.

Gold was subdued near $5,170 an ounce, driven by a stronger dollar and renewed inflation concerns stemming from surging oil prices as the fighting in Iran continued to rage on.

Oil prices were up more than 7 percent in Asian trade, adding to gains in the previous session following reports that two international oil tankers were attacked in the northern Persian Gulf near Iraq and Kuwait.

Iran has said the world should be ready for oil at $200 per barrel if the conflict and shipping disruptions intensify.

Overnight, U.S. stocks ended mixed for a second straight session as another increase in oil prices on growing rhetoric about the Iran war and worries about a protracted confrontation overshadowed tame inflation data.

Treasuries slid across the curve despite CPI inflation rising 2.4 percent annually in February, in line with expectations.

The tech-heavy Nasdaq Composite inched up marginally while the S&P 500 ended flat with a negative bias and the Dow dipped 0.6 percent.

European stocks closed lower on Wednesday amid escalating U.S.-Iran tensions, with three more vessels hit by unknown projectiles in the Strait of Hormuz and American forces sinking 16 mine-layers in an operation framed as a pre-emptive strike against Iran's plans to mine the waterway, which carries 20 percent of the world's oil and gas supply.

The pan European Stoxx 600 dropped 0.6 percent. The German DAX lost 1.4 percent, France's CAC 40 slipped 0.2 percent and the U.K.'s FTSE 100 shed 0.6 percent.