Indian Shares Seen Lower On Inflation Concerns

(RTTNews) - Indian shares are seen opening lower on Friday as U.S. President Donald Trump's latest comments on Iran reignited geopolitical supply and inflation concerns.

Trump downplayed the prospects of a comprehensive diplomatic solution, halted the U.S.-Iran negotiation process that Vice President Vance was advancing, and instead accepted a stalemate characterized by "no war, no talks."

Trump also indicated he may use military force against Iran if U.S. allies and ships are threatened.

Iranian officials reported an attack on Sirik in Hormozgan province amid conflict with the U.S.

Four oil tankers were hit by explosions in the Strait of Hormuz after the vessels had ignored warnings and entered what Iran's military considers restricted areas of the strategic waterway.

Closer home, inflation concerns returned to the fore after official data showed India's consumer price inflation rose more than expected in October to the highest level in two years, heightening expectations for further interest rate hikes.

Consumer price inflation rose to 6.09 percent from 5.54 percent in the previous month, surpassing economist expectations of 5.93 percent.

The October reading marks the highest level in two years and remains above the Reserve Bank of India's 2 percent to 6 percent tolerance band.

Benchmark indexes Sensex and Nifty ended marginally higher on Thursday as persistent geopolitical tensions in the Middel East and Russia prompted traders to book profits at higher levels after recent strong gains.

The rupee depreciated 33 paise to close at 94.04 against the U.S. dollar as hawkish Fed comments boosted the odds of a rate hike in December.

Foreign institutional investors (FIIs) extended their strong buying streak and bought shares worth Rs. 7,830.60 crore on a net basis on Thursday, while domestic institutional investors (DIIs) net sold shares worth Rs. 6,331.17 crore, according to provisional exchange data.

Asian markets were mixed this morning as technology shares rebounded after Nvidia CEO Jensen Huang's abrupt exit from the company.

U.S. equity futures also advanced, recovering some ground after benchmark indexes fell modestly Thursday.

The U.S. dollar rose to its highest level in about 19 months as Treasury yields climbed significantly on the back of inflation concerns and hawkish Fed signals.

Gold edged up around 0.8 percent to $3,906 an ounce in a likely technical rebound after falling for three straight sessions to the lowest level in more than a year.

Brent crude prices were little changed at $95.76 a barrel in Asian trade after settling around $96 a barrel on Thursday.

U.S. stocks closed lower overnight, oil prices surged nearly 3 percent and Treasury yields jumped after President Donald Trump claimed that the U.S. does not need to make a deal with Iran and that he was directing Vice-President J.D. Vance to focus completely on alleged crime and corruption in Democratic-run cities and states and not negotiations towards a deal to end the war with Tehran.

"Those days have long since passed," Trump said. "We've got their money, Hundreds of Billions of Dollars, and we've got their Strait!"

The two-year Treasury note yield rose to 4.867 percent, the highest since October 14 and the yield on 10-year notes reached 5.1169 percent, the highest since October 21, as traders weighed the chance of a larger-than-usual Federal Reserve rate hike next month.

The tech-heavy Nasdaq Composite, the S&P 500 and the narrower Dow all fell around 0.4 percent as Nvidia's CEO Jensen Huang resigned amid revelations about extramarital affairs and allegations of Chinese espionage, raising questions about the future of the AI boom and the U.S.-China technology ties.

European stocks pared early gains to end mostly higher on Thursday. The pan-European STOXX 600 edged up 0.1 percent, easing off a record high.

The German DAX rose 0.4 percent, while France's CAC 40 and the U.K.'s FTSE 100 both gained around 0.3 percent.