Indian markets are expected to open lower on 11 May despite record highs on Wall Street, as rising crude oil prices, the ongoing US-Iran conflict and foreign investor outflows keep sentiment cautious.
Global markets entered the new trading week with mixed sentiment as record-breaking gains on Wall Street were overshadowed by rising geopolitical tensions and surging crude oil prices linked to the ongoing US-Iran conflict.
According to Mr. Devarsh Vakil, Head of Prime Research at HDFC Securities, “The S&P 500 and the NASDAQ recorded their sixth consecutive weekly gains as stronger-than-expected quarterly earnings growth lifted both indexes to fresh record highs.”
Also Read
The NASDAQ surged 4.5% during the week, while the S&P 500 gained 2.4%. The Dow Jones Industrial Average also ended marginally higher.
Vakil noted that stronger-than-expected US economic data and sustained momentum in artificial intelligence-related sectors continued to support investor confidence globally.
Strong US jobs report boosts confidence in American economy
Investor sentiment improved further after the United States reported surprisingly strong employment numbers for April.
The US economy added 115,000 jobs during the month, far exceeding market expectations of around 55,000 jobs. March payroll figures were also revised upwards to 185,000, while the unemployment rate remained steady at 4.3%.
“Major US indexes reached all-time highs at the end of last week, driven by a robust April employment report,” Vakil said, adding that the data reinforced confidence in the resilience of the American economy despite inflation and geopolitical concerns.
Analysts believe the jobs data has reduced immediate fears of an economic slowdown, although it may complicate hopes for early interest rate cuts.
Corporate earnings deliver biggest surprise since 2021
Corporate earnings season also continued to outperform expectations, further lifting market sentiment.
First-quarter earnings growth for S&P 500 companies is now expected to rise nearly 27.7%, marking the strongest expansion since the fourth quarter of 2021.
“At the end of March, the projected earnings growth rate was just 13.1%,” Vakil noted, highlighting the sharp improvement in corporate profitability expectations over recent weeks.
Technology and energy companies remained among the strongest contributors to earnings growth.
Iran conflict and crude oil prices dominate market concerns
Despite Wall Street’s rally, global markets remain increasingly concerned about the ongoing US-Iran conflict and its impact on energy supply chains.
Brent crude prices have climbed above 105 dollars per barrel amid fears of disruptions around the Strait of Hormuz, one of the world’s most strategically important oil shipping routes.
Vakil said, “The energy sector has become a dominant market leader in 2026, with the S&P Energy Select Sector index rising nearly 25% year-to-date.”
Analysts warn that sustained high oil prices could increase inflation globally and place additional pressure on energy-importing economies such as India.
Inflation fears reduce expectations of rate cuts
Rising energy prices have also intensified inflation concerns in the United States.
Recent data showed US consumer inflation accelerating to 3.3%, compared to 2.4% previously. Energy prices were a major contributor to the rise, with the energy component of inflation increasing 12.5% year-on-year.
“Recent data showing US inflation accelerating to 3.3% has led major financial institutions to project that interest rate cuts may be delayed until 2027,” Vakil explained.
He added that some analysts are now assigning higher probabilities to possible rate hikes later this year if inflation and energy costs continue rising sharply.
A key US Consumer Price Index report scheduled for release later this week is expected to provide further direction to global markets.
Consumer confidence weakens amid energy price shock
While stock markets rallied, consumer confidence in the United States continued to weaken.
The University of Michigan’s consumer sentiment index fell to a preliminary May reading of 48.2, down from 49.8 in April and significantly below February’s recent high of 56.6.
Experts say rising fuel costs and inflation pressures are increasingly affecting household spending confidence.
Asian markets opened mixed on Monday as investors reacted to rising oil prices and geopolitical uncertainty.
South Korea’s Kospi index climbed nearly 3.7% to another record high, supported by strong gains in technology and export-related stocks.
However, broader Asian sentiment remained cautious due to concerns that tensions between the United States and Iran could worsen further and disrupt global trade flows.
Indian markets close lower amid foreign investor outflows
Indian benchmark indices ended the previous week on a weak note as profit booking and continued foreign institutional investor outflows weighed on sentiment.
The Nifty 50 slipped around 0.6% to close near 24,176, while the Sensex declined roughly 0.7% to around 77,700.
“The Indian market is in a consolidation phase, with the Nifty likely to oscillate in a broad band between 23,800 and 24,400,” Vakil said.
He added that market direction would depend heavily on foreign investor flows, crude oil trends and policy signals from the government or the Reserve Bank of India.
PM Modi’s remarks add focus on economic pressures
Prime Minister Narendra Modi recently urged citizens to reduce unnecessary fuel consumption, postpone gold purchases and avoid non-essential foreign travel amid growing global uncertainty.
According to Vakil, rising crude oil prices and global instability are increasing pressure on India’s foreign exchange reserves, making it important to reduce discretionary spending linked to imports and overseas travel.
The Prime Minister also encouraged greater use of public transport, electric vehicles and locally manufactured products.
Markets expected to open lower today
Despite record highs in US markets, Indian equities are expected to open lower on Monday due to weak global cues and concerns over continued high energy prices.
“Equity futures for the US markets edged lower on Monday morning following a record-setting session on Friday,” Vakil said.
He added that investor sentiment has weakened after the rejection of a peace proposal intended to ease the Iran conflict, increasing fears that the Strait of Hormuz could remain closed for longer than expected.
Analysts expect volatility to remain elevated in the coming sessions as investors closely monitor crude oil prices, geopolitical developments, inflation data and foreign institutional activity.
Published: 11 May 2026, 09:02 am IST
Disclaimer: Kindly avoid objectionable, derogatory, unlawful and lewd comments, while responding to reports. Such comments are punishable under cyber laws. Please keep away from personal attacks. The opinions expressed here are the personal opinions of readers and not that of Mathrubhumi.