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Oil eases from $110 as Iran keeps its Hormuz offer open, setting up a careful Monday start
Brent slipped towards $108 when trading resumed after the weekend. Indian shares open a holiday-shortened week with foreign funds still net sellers and GIFT Nifty pointing slightly lower.
Key points
- Brent crude was trading near $108.4 a barrel early on Monday, about 1.3% below Friday's close.
- GIFT Nifty last traded at 23,085, around 60 points under the Nifty's Friday close of 23,146.
- Markets are shut on Tuesday for Dussehra, leaving four sessions this week.
Indian shares go into Monday’s session with oil a little calmer than it looked on Friday night, but with little else to settle nerves after a weekend of threats and counter-offers over the Strait of Hormuz.
When oil futures reopened after the weekend, Brent crude eased to about $108.4 a barrel, roughly 1.3% below Friday’s settlement of $109.86, its highest close since May. US crude slipped to about $100.8. The moves were modest, and Brent kept most of a weekly gain of almost 5%.
Iran’s offer, America’s warning
The weekend did not move the Gulf any closer to a deal. On Sunday Iran’s Foreign Minister Abbas Araghchi said Tehran’s seven-day plan to reopen Hormuz was still on the table. The plan asks Washington to end its blockade of Iranian ports, lift oil sanctions and halt hostilities on other regional fronts, and Iran says shipping could restart within six days of the United States accepting it. Tehran says Washington has not yet answered all seven of its conditions.
A day earlier Iran’s army had said the strait would reopen only if US forces left the region. The US Central Command said on Saturday that its blockade had turned back 138 commercial vessels. US Vice President JD Vance defended the American naval presence, saying fuel prices at home “would be three times higher without that protection”.
Analysts at Goldman Sachs have sketched both ends of the risk: crude climbing to $120 if attacks on Gulf shipping intensify, and falling towards $80 if exports return to normal.
What it means for Indian shares
The Nifty closed on Friday at 23,146.15 after gaining 2.8% last week, its best week in months, led by IT companies. GIFT Nifty, the dollar-denominated contract traded in Gandhinagar, last changed hands at 23,085 in the early hours of Saturday, about 60 points below that close, which points to a slightly softer start. It resumes trading at 6:30 am.
Foreign money remains the weak spot. Foreign institutional investors sold a net ₹15,440 crore of Indian shares in the week to 16 October, almost all of it absorbed by ₹14,792 crore of buying from domestic funds. Their October outflow stands at about ₹52,100 crore, although they turned small net buyers on Friday as US bond yields eased from above 5.3% to about 5.1%.
The rupee strengthened for six straight sessions last week to close at 94.89 to the dollar, helped by the RBI and by a dip in oil earlier in the week. A Brent price that stays above $105 would test that recovery, since India imports most of its crude. Foreign exchange reserves have fallen to $726.03 billion as the central bank has defended the currency.
A short, crowded week
Exchanges are closed on Tuesday for Dussehra, so the week has four sessions. Monday brings results from Bajaj Finance, UltraTech Cement, Hindustan Zinc and Union Bank of India, and traders will react first to Saturday’s numbers from ICICI Bank, Axis Bank and HDFC Bank. The ₹30,200 crore Jio Platforms share sale opens on Wednesday.
Analysts see support for the Nifty around 22,800. Overseas, US results from Netflix, Tesla and Meta and the Federal Reserve’s meeting on 27-28 October will shape the mood in technology stocks after the Nasdaq’s worst week since June.