India shares face selloff as Gulf conflict spikes oil above $100
Indian equities are headed for a fifth straight losing session as a surge in crude prices reignites inflation fears, compounding pressure from new US tariffs and disappointing guidance from Infosys.
Indian equities are poised to extend losses into a fifth consecutive session, with Gift Nifty indicating a gap-down open of nearly 169 points. The selloff is driven by a broad global risk-off mood triggered by escalating Middle East tensions and a sudden surge in energy costs.
Brent crude jumped 7% to breach the $100 mark on Thursday, settling at $99.97, and is on track for a 13.5% weekly gain. WTI futures similarly rallied 6.2% to $91.49. The price spike follows the US military's 13th consecutive night of strikes on Iran, with the latest wave lasting over two hours. For a net oil-importing nation like India, sustained triple-digit crude prices threaten to revive inflationary pressures and widen the current account deficit.
The inflation shock rippled through global markets, lifting Treasury yields and dragging US equities lower overnight. The Nasdaq Composite bore the brunt of the selling, falling 2.15% to 25,137.69, while the S&P 500 dropped 1.21% to 7,408.30 and the Dow Jones Industrial Average declined 0.97% to 51,711.65. Asian markets followed suit, with Japan’s Nikkei 225 dropping 2.85% and South Korea’s Kospi slipping 2.91%.
Domestic investors are also grappling with fresh trade headwinds after the US announced tariffs of 10% to 12.5% on 60 countries under Section 301. India was placed in the 10% bracket, facing penalties over what the US Trade Representative cited as inadequate measures against goods produced with forced labour.
Corporate earnings offered little reprieve. Infosys reported a 3.9% quarter-on-quarter revenue increase to ₹48,211 crore, but an 8.6% drop in net profit to ₹7,769 crore. More significantly, the IT bellwether trimmed the upper end of its FY27 revenue growth guidance, signalling caution about the demand pipeline. This follows a Thursday session where the benchmark Sensex fell 0.47% to 76,391.39 and the Nifty 50 lost 0.53% to close at 23,869.60.
Macro data out of the US showed underlying labour market resilience, with initial jobless claims unexpectedly falling by 22,000 to 187,000—the lowest level since September 1969. However, strong employment figures do little to soothe rate fears when energy costs are spiking. In Japan, core inflation accelerated to 1.6% in June but remained below the central bank's 2% target for a fifth straight month.
Safe-haven demand kept gold near record levels, with spot prices easing slightly to $4,042.77 per ounce but holding onto a 0.6% weekly gain.
“Given the mixed earnings outlook, elevated geopolitical risks, and persistent volatility, we continue to advocate a stock-specific approach while maintaining disciplined risk and position management,” said Ajit Mishra, SVP of Research at Religare Broking Ltd.
