June 8 (Reuters) – Indian shares were set to open lower on Monday, tracking a sharp selloff across Asian markets as a spike in oil prices, renewed Middle East tensions and rising fears of a U.S. interest rate hike weighed on risk appetite.
GIFT Nifty futures were trading at 23,138, as of 8:06 a.m. IST, indicating that the Nifty 50 would open about 1% below its previous close of 23,366.70.
Brent crude futures rose 3.5% to $96.5 a barrel after Iran launched missiles at Israel following Israeli strikes on Beirut, reducing hopes for an end to the wider war and raising fears of disruption to oil supplies.
U.S. President Donald Trump said on Sunday he would urge Israeli Prime Minister Benjamin Netanyahu not to retaliate, even as Hezbollah and Tehran vowed further responses and Israel warned of a renewed campaign if attacked.
The broader MSCI Asia ex-Japan index tumbled 3.4%, while South Korea’s KOSPI fell 6.9% and Japan’s Nikkei lost 4.4%, led by declines in AI-linked stocks after their recent rally.
U.S. equities also fell on Friday after a stronger-than-expected May jobs report lifted expectations for a Federal Reserve rate hike. The probability of a Fed rate increase by December 2026 rose to 72.3% from 45.2% a week earlier, according to CME FedWatch.
Higher U.S. rates typically reduce the appeal of emerging markets such as India. Foreign portfolio investors have already sold $28.63 billion of Indian equities so far in 2026, exceeding 2025’s record annual outflows, amid concerns over elevated crude prices, the economic fallout from the Iran conflict and India’s limited exposure to AI pure-play companies.
The Reserve Bank of India kept its benchmark interest rate unchanged on Friday and announced a slew of measures to support foreign inflows and the rupee.
It raised its inflation forecast for fiscal year 2027 to 5.1% from 4.6% and cut its economic growth estimate to 6.6% from 6.9%, though official data after market hours on Friday showed that growth remained resilient at 7.8% in the March quarter, as domestic demand offset external weakness.
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(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Subhranshu Sahu)