INDIA STOCKS-Indian shares seen opening higher after 3-session drop; oil surge clouds outlook

Oct 23 (Reuters) - Indian shares are set to open higher on Friday after three sessions of losses, though gains may prove fleeting due to a spike in oil prices on escalating Middle East tensions.

GIFT Nifty futures were at 22,830.50 at 7:42 a.m. IST, indicating a positive start for the benchmark Nifty 50 .NSEI, which closed at 22,687.65 on Thursday.

Both the Nifty and Sensex .BSESN indexes are down about 2% so far this week, with sentiment dampened by a rise in Brent crude oil futures to $113.5 a barrel, on concern over further energy disruption after Houthi attacks on top exporter Saudi Arabia.

"Recent price action suggests buyers are attempting to defend lower levels, but sellers continue to emerge on rebounds, keeping the market bias cautious," said Hitesh Tailor, technical research analyst at Choice Broking.

Asian markets opened lower, dragged by tech stocks after a drop in Wall Street equities overnight. MKTS/GLOB

The Nasdaq slumped over 2% as Meta META.O shares lost nearly 8% after the Facebook parent posted its first cash outflow in more than decade due to its AI-related expenditure.

Foreign portfolio investors were net buyers of Indian stocks on Thursday, with inflows amounting to 10.22 billion rupees ($107.79 million). Domestic institutional investors purchased a net 16.14 billion rupees worth of stocks, as per NSE's provisional data.

"Domestically, near-term market direction will depend on quarterly earnings delivery, as investors react to management commentary on demand outlook for coming quarters," said Vinod Nair, head of research at Geojit Investments.

Colgate-Palmolive India COLG.NS will be in focus after reporting a rise in its quarterly profit, helped by demand for its toothpaste portfolio.

Swiggy SWIG.NS planned to deepen the presence of its quick-commerce business, Instamart, after the company posted a bigger-than-expected loss in the September quarter.

STOCKS TO WATCH

** eMudhra EMUD.NS exits website security business after flaws trigger global alarm. The shares have dropped 36% in two sessions

** Hatsun Agro HAPL.NS posts a 5.5% year-on-year rise in second-quarter profit to 1.16 billion rupees; revenue rises about 20%

** HPCL HPCL.NS reports a 9% drop in the September quarter profit, due to higher tax expenses and a sharp spike in oil prices that squeezed the fuel retailer's margins

($1 = 94.8175 Indian rupees)