Indian shares set to open higher as crude oil prices slump to two-month low

Indian shares are set to open higher on Thursday following a sharp drop in crude oil prices to a two-month low. GIFT Nifty futures stood at 24,295.5 at 8:01 a.m. IST, pointing to a positive start for the Nifty 50 after it closed at 23,960.6 on Wednesday.

Market Recovery

Foreign investors purchased Indian shares worth 72.84 billion rupees, or $769.65 million, on Wednesday according to provisional data. This marks the fourth straight session of buying. Brent crude futures fell 1% to $93.5 per barrel, following an 8.7% slide in the prior session. The domestic Nifty 50 and BSE Sensex have climbed 5.6% over the last five sessions in their longest winning streak in nearly five months.

Expert View

Hariselvan Radhakrishnan, founder and CEO of research advisory firm HST Wealth, noted that the large drop in oil prices can materially improve India's near-term macro and earnings outlook if the trend holds. Meanwhile, exchange operator BSE reported a 45% rise in second-quarter profit, and Apollo Hospitals Enterprise saw its quarterly profit grow by nearly a third.

Context

Lower oil prices generally help India's economy because the country imports a large share of its energy needs. Cheaper oil reduces import costs and can help keep inflation in check.