Indian shares slip at open as high oil prices fuel inflation worries

Indian shares opened lower on Thursday, extending losses from the previous two sessions, as an escalating Middle East war kept oil above $110 per barrel, stoking inflation concerns for the world's third-largest importer of crude.

The benchmark Nifty 50 fell 0.54% to 22,687.75, and the Sensex shed 0.5% to 73,343.3, as of 09:15 a.m. IST.

Fifteen of the 16 major sector logged losses. The broader small-caps and mid-caps dropped 1.3% each.

Brent crude futures were up 1.6% at $110.6 per barrel as more attacks in Saudi Arabia by Yemen's Houthis prompted the United States to order some diplomats and family members to leave its missions in the kingdom.

Higher oil prices are a negative for India, which imports the bulk of its energy requirements, as they can increase inflation, strain its fiscal deficit and hit corporate profits.

Members of India's rate-setting panel indicated that further rate hikes may be needed to curb inflation but stopped short of endorsing an aggressive tightening cycle over risks to economic growth, minutes of the committee's latest policy meeting released on Wednesday showed.