Asian Markets Mixed; Oil Climbs Amid US-Iran Tensions, Infosys Dips

Top Summary

• What happened: Asian equity markets traded mostly lower, mirroring Wall Street's weakness, while oil prices increased amid ongoing US-Iran conflict negotiations. Infosys shares dipped despite reporting strong Q4 earnings.
• Why it matters: Market volatility is increasing due to geopolitical tensions and fluctuating oil prices. Infosys' performance impacts investor confidence in the Indian IT sector.
• What changes for people: Investors face increased risk and uncertainty in equity and commodity markets. Rupee weakness impacts import costs.
• Who is affected: Investors in Asian equities, particularly in Hong Kong, China, South Korea, and Australia. Retail traders in crude oil derivatives are also heavily impacted.

Asian Markets See Mixed Performance

Asian equity markets exhibited a mixed performance on Friday, primarily driven by negative cues from Wall Street. Rising oil prices, fueled by stalled negotiations between the United States and Iran, added to market anxieties. US stock futures also showed weakness after Wall Street's retreat from record highs.

Japan's Nikkei 225 stood out, gaining 0.6 per cent to reach 59,504.22, boosted by strong buying in technology shares. The index briefly touched an all-time intraday high above 60,000 on Thursday.

However, other key markets in Asia faced downward pressure. Hong Kong’s Hang Seng Index decreased by 0.8 per cent to 25,714.99, and China’s SSE Composite Index fell 0.5 per cent to 4,071.52. South Korea’s KOSPI slipped 0.4 per cent to 6,452.33, while Australia’s S&P/ASX 200 dropped 0.6 per cent to 8,745.00.

Taiwan Bucked the Trend

Taiwan was a notable exception, with the TAIEX surging 2.5 per cent. This surge was primarily driven by a 4 per cent jump in shares of Taiwan Semiconductor Manufacturing Company (TSMC), a major component of the benchmark index.

Rupee Weakens Amidst Global Uncertainty

The Indian rupee continued its decline for the fifth consecutive session, weakening by 24 paise to 94.25 against the US dollar in early trading. Fluctuations in crude oil prices, a strong US dollar, and uncertainty regarding peace in West Asia contributed to the rupee's weakness.

Concerns regarding shipping activity through the Strait of Hormuz, particularly after the US military seized another Iranian oil tanker, further unsettled the market. President Trump's directive to take aggressive action against Iranian boats accused of deploying mines added to the tensions.

Persistent foreign fund outflows from Indian equities also weighed on the rupee. According to forex traders, heavy selling by overseas investors put downward pressure on the domestic currency.

Infosys Shares Fall After Earnings Announcement

Shares of Infosys experienced a sharp decline, dropping as much as 3.72 per cent to an intraday low of Rs 1,194.50 on the NSE, despite reporting a strong rise in quarterly earnings. The company's American depositary receipts also fell about 4 per cent.

For the quarter ended March 31, 2026, Infosys reported a consolidated net profit of Rs 8,501 crore, a 21 per cent year-on-year increase from Rs 7,033 crore. Revenue from operations for the quarter stood at Rs 46,402 crore, a 13.4 per cent increase from Rs 40,925 crore in the previous year.

Compared to the previous quarter, profit after tax rose 28 per cent from Rs 6,654 crore, and revenue increased 2 per cent from Rs 45,479 crore. The company reported an operating margin of 21 per cent for the quarter, unchanged year-on-year but improved by 260 basis points sequentially. In dollar terms, revenue stood at $5,040 million.

Looking ahead to FY27, Infosys has projected constant-currency revenue growth in the range of 1.5 per cent to 3.5 per cent and has retained its operating margin guidance at 20 per cent to 22 per cent.

Anand Rathi's View on Infosys

Anand Rathi Research Team provided insights on Infosys' Q4 performance. They noted a muted Q4 top line with revenue declining 1.3% q/q cc. However, LTM large deal TCV for FY26 reached $14.9bn, with Q4 contributing $3.2bn across 19 deals.

EBIT margins came in at 21% (+20bps q/q). Management guided for FY27 top-line growth of 1.5-3.5% with EBIT margins in the range of 20-22%.

“AI-led initiatives, large deals & vendor consolidation engagements are seeing increasing traction, but this is being offset by compression from AI-led productivity pass-throughs & client caution in parts of the portfolio.”

 

Anand Rathi revised their FY27/28e Revenue and PAT estimates, arriving at a TP of Rs1,478. Risks include accelerated AI-led revenue compression, higher sub-con costs, and intensifying competitive pricing.

Crude Oil Derivatives See Retail Frenzy

The sharp rise in global crude prices following the US-Iran conflict has sparked a surge in retail participation in India’s oil derivatives market, leading to a substantial increase in futures and options trading on domestic exchanges.

Trading volumes in crude oil futures on the Multi Commodity Exchange of India rose dramatically in March. Average daily traded lots climbed to 125,662, nearly four times higher than February’s 32,183 lots. The surge was equally evident in mini crude contracts. Average daily volumes in crude oil mini futures soared 473 per cent between February and March, reaching 356,672 lots.

Brokerages noted that much of this increased retail activity was concentrated in short-duration trades, especially in the options segment, highlighting the speculative nature of investor participation. Margin requirements on crude oil contracts rose to nearly 48 per cent.

Nifty Outlook

According to Anand James, Chief Market Strategist, Geojit Investments Limited, the achievement of a downside objective of 24140 suggests a potential bounce back.

"This would require a push beyond 24310, to serve as a confirmation though. Alternatively, inability to float above 24210 could be seen as a weak signal, exposing 24070-23980 or even 23500."

 

What to Watch Next

Investors should closely monitor developments in US-Iran negotiations and their impact on global oil prices. Also, closely watch Infosys' stock movement to gauge market reaction to their future guidance and the broader implications for the IT sector.