rewrite this title in other words: Indian Shares Likely To Drift Lower As Gulf Tensions Flare Up

(RTTNews) – Indian shares are seen opening lower on Friday following mixed cues from global markets. Geopolitical tensions returned to the fore as efforts to resolve the Iran war face a stalemate.

Oil prices climbed on supply concerns after a ship anchored off the United Arab Emirates was seized and taken toward Iran, and another – a cargo ship near Oman – sank after being attacked.

In a Telegram post, Iran’s Foreign Minister Abbas Araghchi has accused the United Arab Emirates of playing an active role in the U.S.-Israeli war against his country.

The ongoing instability in the region comes as both the U.S. and China agreed on the need to keep the nearby Strait of Hormuz shipping lane open to support the free flow of energy.

At the Beijing summit, U.S. President Donald Trump described the talks as “great.” According to a statement issued by China’s foreign ministry, the two leaders have agreed to a “constructive strategic stable relationship” as the new orientation for bilateral relations over the next three years and beyond.

Benchmark indexes Sensex and Nifty rose over 1 percent each on Thursday on the back of firm cues from global markets.

The rupee neared 96 per dollar before recovering to close at 95.76 on central bank intervention and reports suggesting that the government was considering a significant reduction in taxes paid by foreign investors on Indian bonds.

Foreign investors and domestic institutional investors net bought shares worth Rs 187 crore and Rs 684 crore, respectively on Thursday, according to provisional exchange data.

Data released on Thursday showed that India’s wholesale inflation Jumped 8.30 percent year-over-year in April, much faster than the 3.88 percent rise in March due to higher costs for crude oil caused by the impact of the Middle East war. Moreover, this was the highest inflation rate since October 2022.

Asian markets were broadly lower this morning as Brent crude futures strengthened above $107 a barrel amid concerns over ship attacks and seizures near the Strait of Hormuz.

The U.S. dollar was set for a weekly gain of more than 1 percent and U.S. Treasury yields hit one-year highs amid bets that the Federal Reserve may raise interest rates this year, even under the new leadership of Kevin Warsh.

Gold fell nearly 1 percent to $4,614 an ounce, reaching a more than one-week low and on track for a weekly decline.

Overnight, U.S. stocks hit new records, driven by continued strength in AI-related companies, solid economic data and optimism surrounding the U.S.-China summit in Beijing.

The tech-fueled rally rolled on as Cisco reported upbeat Q3 results and U.S. authorities temporarily allowed around 10 Chinese companies to buy Nvidia’s advanced H200 AI chips.

In economic news, retail sales extended their advance in April, and weekly jobless claims increased moderately last week, underscoring resilience.

Fed officials continued to emphasize inflation risks, with Kansas City Fed President Jeffrey Schmid calling inflation the most “pressing risk” to the U.S. economy.

While the tech-heavy Nasdaq Composite and the S&P 500 surged by 0.9 percent and 0.8 percent, respectively to reach new record closing highs, the Dow gained 0.8 percent to close above 50,000 for the first time in three months.

European stocks closed higher for a second consecutive session on Thursday, driven by gains in technology stocks.

The pan-European STOXX 600 rose 0.8 percent. The German DAX rallied 1.3 percent, France’s CAC 40 advanced 0.9 percent and the U.K.’s FTSE 100 added half a percent.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.