Indian shares set for cautious start; MSCI rejig, HDFC Bank in focus

Business Recorder reported that Indian shares were set for a quiet Monday open, as investors weighed possible swings from an MSCI rebalance under a new closing auction system. The Iran conflict and HDFC Bank's CEO exit were also seen weighing on sentiment. GIFT Nifty futures pointed to a subdued start for the Nifty 50, which closed Friday at 24,175.65 after a third straight weekly fall.

MSCI will apply its quarterly changes at Monday's close, with the revised constituents effective from September 1. Its August review added four Indian stocks to the widely followed Global Standard index and removed three. This is the first rebalance under India's new closing auction arrangement, which has already caused sharp swings in benchmarks, mainly on monthly derivatives expiries. HST Wealth's founder and CEO, Hariselvan Radhakrishnan, warned that passive flows could create outsized moves in the final half-hour and make the close less representative of sentiment.

Global sentiment also soured after US forces hit two Iranian launchers, the first recorded American action against Iran since late July. Oil prices rose, with Brent crude futures up 2.5% at $90 a barrel, while Asian equities slipped 0.7%. HDFC Bank stayed in focus after Sashidhar Jagdishan, its chief executive, said on Saturday he would not seek another term ending in October. Reuters, citing two sources, reported Deputy Managing Director Kaizad Bharucha may be one of two options for the next CEO.