Indian markets set for flat open as UAE exits OPEC, crude falls below $100

The United Arab Emirates announced its withdrawal from OPEC and OPEC+ on Tuesday, a decision that sent ripples through global markets already unsettled by an energy crisis rooted in conflict across Iran. The move struck at the heart of what has long been the cartel's greatest asset: the appearance of unified purpose among oil-exporting nations, however fragile that unity often proved in practice. With the UAE gone, analysts warned of potential fracturing within the group itself, at a moment when the world could least afford it.

India's stock markets braced for a muted opening on April 29, following a cautious Tuesday session. The NSE Nifty 50 had closed down 97 points, or 0.40%, settling at 23,996. The BSE Sensex fell 417 points, or 0.54%, to finish at 76,887. The losses reflected broader unease rippling across Asia and the United States as investors weighed the implications of the UAE's departure and digested fresh reports of weakness at OpenAI, the artificial intelligence company whose fortunes have become a barometer for tech sector health.

Across Asia on Wednesday morning, caution was the prevailing mood. South Korea's Kospi index dropped 0.39%, while its smaller-cap counterpart, the Kosdaq, held steady. Hong Kong's Hang Seng index futures stood at 25,762, slightly above the previous close of 25,679.78. Japanese markets remained closed for a holiday. In the United States, Tuesday's close had already signaled weakness: the broad market index fell 0.49% to 7,138.80, the Nasdaq Composite shed 0.9% to 24,663.80, and the Dow Jones Industrial Average slipped 25.86 points, or 0.05%, to 49,141.93.

Crude oil prices, despite the geopolitical turbulence, moved lower. West Texas Intermediate futures fell 0.57% to trade at $99.36 per barrel—below the psychologically significant $100 mark. Brent crude traded 0.33% lower at $110.90. On COMEX, crude climbed 0.93% to $97.27 a barrel, suggesting some divergence in how different markets were pricing the same underlying commodity. Gold, typically a haven during uncertainty, declined 1.24% to Rs 1,49,986.8 per 10 grams in India, with the 24-karat rate in Delhi at Rs 1,49,730 per 10 grams. On COMEX, gold fell 0.19% to Rs 4,685 per ounce. Silver proved more volatile, dropping 2.07% in India to Rs 2.37 lakh per kilogram, though it had surged to record highs in January as geopolitical tensions and speculative buying drove prices upward before volatility set in.

Institutional money flows told their own story. Foreign institutional investors were net sellers, offloading shares worth Rs 1,835.26 crore on April 28. Domestic institutional investors, by contrast, were net buyers of Rs 1,591.85 crore, suggesting some confidence among local money managers even as global capital retreated. The rupee depreciated 0.37% to close at 94.55 against the dollar, while the US Dollar Index, which measures the greenback's strength against six major currencies, edged down 0.02% to 98.60.

Sector performance on Tuesday revealed pockets of strength amid the broader caution. Beverages and non-alcoholic stocks led gains, rising 5.8% in market capitalization, followed by non-ferrous metals and consumer durables. Diagnostics also posted gains. Small finance stocks, however, fell the most, declining 0.8%. Among business groups, the Future Group's market capitalization rose 5.8%, with Praxis Home Retail surging 10%. The Kirloskars Group also advanced. The Shriram Group, by contrast, saw its market cap fall 3.2%, the steepest decline among major conglomerates. As markets prepared for Wednesday's open, the question hanging over traders was whether the UAE's exit from OPEC would trigger further defections or whether the cartel could stabilize itself amid an energy crisis that showed no signs of abating.