(fxcue news) - Indian shares look set to extend losses on Friday amid worries that the escalation of conflict with Pakistan, rising oil prices and a weakening rupee could hurt capital flows. India on Thursday night neutralized Pakistan military's attempt to hit military stations in Jammu, Pathankot, Udhampur and some other locations with missiles and drones, according to defense ministry officials. Indian air defense units successfully intercepted at least eight missiles launched by Pakistan, that targeted key border areas. A crucial International Monetary Fund (IMF) board meeting will take place today, where India's executive director at the IMF will push for Pakistan's re-listing in FATF's grey list. Benchmark indexes Sensex and Nifty fell around half a percent each on Thursday as tensions escalated between India and Pakistan after the recent Pahalgam attack. The rupee closed at 85.71 against the dollar, down from 84.83 on Wednesday - marking its worst day since Feb 2023. Asian stocks were mostly higher this morning, with Japanese markets leading regional gains amid hopes that the country will reach a trade agreement with the U.S. in June. Chinese markets underperformed ahead of trade data due later in the day. The dollar eyed a weekly rise and gold was subdued below $3,300 per ounce while oil prices were little changed after rising around 3 percent on Thursday, reflecting optimism about the potential for further U.S. trade deals. U.S. stocks ended firmly in positive territory overnight as President Trump unveiled the framework of a trade agreement with the U.K., the first major agreement since the U.S. imposed widespread tariffs earlier this year, and signaled upcoming talks with China this week would be more substantial than initially thought. The tech-heavy Nasdaq Composite jumped 1.1 percent, while the Dow and the S&P 500 both rose about 0.6 percent. European stocks ended mixed on Thursday as investors reacted to the Fed and BoE rate decisions as well as the U.S.-U.K. trade deal. The pan European STOXX 600 inched up 0.4 percent. While the U.K.'s FTSE 100 dropped 0.3 percent as the trade deal left in place Trump's 10 percent tariffs for many products, including cars. France's CAC 40 added 0.9 percent and the German DAX rallied 1 percent.