Indian Shares Set For Cautious Start On Weak Asian Cues

(RTTNews) - Indian shares look set to open a tad lower on Tuesday as investors parse the latest developments in the Middle East and monitor oil price movements.

Brent crude futures climbed above $98 a barrel due to continued tensions around Hormuz following reports of American and Israeli strikes on Iranian vessels.

The U.S. conducted 'self-defense strikes' on Iranian missile launch sites and boats near the Strait of Hormuz, clouding the outlook for an interim deal between Washinton and Tehran.

Defense forces across the Gulf are on high alert as Iran pressed ahead with waves of missile and drone attacks on the UAE, Kuwait and Bahrain. Ahead of a third round of diplomatic negotiations between the U.S. and Iran in Geneva today, differences persist over nuclear issues, sanctions relief and regional conflict terms.

Iran's Foreign Ministry spokesman Esmail Baqai said there was some progress in talks with the U.S., but a deal "is not imminent" and that no one can make such a claim.

Benchmark indexes Sensex and Nifty jumped 1.4 percent and 1.3 percent, respectively on Monday on the back of firm cues from global markets following a sharp plunge in crude oil prices.

The rupee closed higher at 95.23 against the dollar, extending gains for a third consecutive session after RBI Governor Sanjay Malhotra indicated that the rupee may be undervalued and that the central bank is prepared to support the local currency to manage any speculative pressures.

FIIs were net buyers of shares to the extent of Rs. 822 crore on Monday, while domestic financial institutions net bought shares worth Rs. 3,857 crore, according to provisional exchange data.

Asian markets were mostly lower this morning, even as Seoul stocks surged as trading resumed after a holiday.

The dollar wobbled amid uncertainty over the U.S.-Iran draft agreement, while gold was subdued at $4,538 an ounce.

U.S. markets were closed on Monday in observance of Memorial Day.

European stocks rose sharply on Monday, reaching their highest level since their record highs in late February, on signs that the U.S. and Iran may soon agree to a deal to extend ceasefire and reopen the Strait of Hormuz.

The pan-European Stoxx 600 surged 1 percent. The German DAX rallied 2 percent and France's CAC 40 climbed 1.8 percent while the U.K. markets were closed for the Spring Bank Holiday.