FX.co ★ Sensex, Nifty Set To Extend Losses As Crude Oil Spikes

Indian stock markets are expected to start on a subdued note this Friday, as global tensions intensify with rising oil prices due to a potential conflict involving Iran and Israel. This comes in light of U.S. President Joe Biden's indication that the United States is contemplating support for potential Israeli strikes on Iranian oil facilities.

In recent developments, Israel has reportedly targeted over a dozen Hezbollah positions in Beirut. This military action follows Iran's firing of approximately 200 ballistic missiles directed at Israel earlier in the week.

Israeli ground troops have further penetrated Lebanon in efforts to counteract Hezbollah forces.

Although oil prices rallied approximately 5% in U.S. trading overnight, they have remained relatively stable in Asian markets. Both Brent and WTI crude oil futures are projected to achieve weekly gains close to 8%, responding to the anticipated disruptions in the Middle East, a region responsible for nearly a third of the world's oil supply.

Market participants might also respond to the Bombay Stock Exchange's decision to terminate weekly derivatives contracts on the Sensex 50 and Bankex starting November 2024, aligning with new regulatory guidelines set by the Securities and Exchange Board of India (SEBI).

On Thursday, India's major indices, Sensex and Nifty, experienced declines exceeding 2%, while the rupee depreciated by 14 paise, closing at 83.96 against the U.S. dollar amid escalating Middle East uncertainties.

This morning, Asian financial markets displayed mixed movements as investors awaited the crucial U.S. jobs report due on Friday, which could offer insights into future Federal Reserve interest rate decisions.

Gold remained relatively stable, whereas the U.S. dollar headed for its strongest weekly rise since April, driven by demand for safe-haven assets.

In the U.S., stock markets slightly declined in their last session, overshadowed by the impending payroll report and apprehensions about an expanding regional conflict in the Middle East.

On the economic front, the latest data shows a modest increase in weekly jobless claims, while the U.S. service sector saw significant growth, reaching a 1-1/2-year peak in September due to robust new order activity.

The Nasdaq Composite saw a marginal decline, the S&P 500 slipped by 0.2%, and the Dow Jones Industrial Average decreased by 0.4%.

European markets also finished lower on Thursday, with recent surveys indicating the eurozone's private sector contracted for the first time in seven months during September.

The pan-European STOXX 600 fell by 0.9%, Germany's DAX decreased by 0.8%, France's CAC 40 dropped 1.3%, and the U.K.'s FTSE 100 edged down by 0.1%.