Indian Shares Face Pressure as Oil Prices Surge Post-Trump Speech

Indian shares are expected to open sharply lower on Thursday as rising oil prices, driven by U.S. President Donald Trump's speech on the Middle East conflict, weigh on investor sentiment. Asian markets reversed course to edge lower this morning, with the dollar advancing and bond yields surging. The benchmark Sensex and Nifty indexes had previously rebounded 1.7% and 1.6%, respectively, on Wednesday after recovering from their steepest drop in six years in March. However, the optimism faded as Trump's remarks provided little clarity on the conflict's timeline. Trump stated that the U.S. military goals were 'nearing completion' and warned Iran would face 'extremely hard' consequences over the next two to three weeks. The lack of a definitive resolution timeline has intensified market jitters. Meanwhile, the Reserve Bank of India (RBI) announced stricter measures to curb speculative activity in the rupee, including limits on non-deliverable forwards and restrictions on rebooking cancelled forward contracts. These actions aim to stabilize the currency amid heightened volatility. Foreign investors sold shares worth Rs 8,331 crore on Wednesday, while domestic institutional investors net bought shares worth Rs 7,172 crore. The mixed investor activity highlights the uncertainty in the market. Gold prices fell nearly 1.5% to $4,689 per ounce as risk appetite waned. In contrast, U.S. stocks ended mostly higher on optimism that the Iran war may soon end, with the Nasdaq Composite gaining 1.2% and the S&P 500 rising 0.7%. European markets also saw gains, with the Stoxx Europe 600 index surging 2.5% following Trump's comments. The geopolitical tensions and market reactions underscore the interconnectedness of global financial markets and energy prices.