Amidst the increasing tension of Israel-Iran conflict, investors will keep an eye on certain sectors in the Indian stock market on Monday. Sector-specific movements may be seen due to geo-political risks and possible rise in crude oil prices.
Amidst the increasing tension of Israel-Iran conflict, investors will keep an eye on certain sectors in the Indian stock market on Monday. Sector-specific movements may be seen due to geo-political risks and possible rise in crude oil prices. After the opening of the stock market, there may be a rise in the shares of many companies, while the shares of many companies may fall. Overall, sector-based fluctuations in the market may remain sharp amid Israel-Iran tensions and investors will need to exercise caution.
First of all, oil exploration companies can remain profitable. Strength is possible in stocks like ONGC, Oil India, Vedanta and Hindustan Oil Exploration Company. Increase in crude oil prices improves the realization and profits of these companies, which can increase the interest of investors.
Oil Marketing Cos – Negative
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There may be pressure on oil marketing companies. Margins of HPCL, BPCL and IOCL may be impacted as cost of crude oil increases and it is not always possible to immediately pass-on the prices.
Paint, Tyre, Aviation- Negative
Weakness can also be seen in shares of paint, tire and aviation sectors. Companies like Asian Paints, Berger Paints, InterGlobe Aviation and JK Tire depend on crude oil and its derivatives as their main raw materials. Oil becoming expensive may have a negative impact on their margins.
However, this situation can be beneficial for shipping companies. A rise in the shares of Shipping Corporation of India and Great Eastern Shipping Company is possible. If there is a disruption in the Strait of Hormuz, shipping rates may increase, which may increase the income of these companies.
Gold Related Stocks- Negative
There may be pressure on gold related companies. Shares like Titan Company and Kalyan Jewelers may see a decline, as rising gold prices amid global uncertainty may impact jewelery demand.
Export Oriented – Negative
Apart from this, export based companies having exposure in the Middle East may also be affected. Earnings of companies like Sun Pharma, Adani Ports and SEZ and TCS may come under pressure, especially if trade with Israel or Gulf countries is affected.
A positive trend can be seen in the defense sector. Investor interest may increase in stocks like HAL, Bharat Dynamics Limited and Bharat Electronics Limited. This sector may get sentimental support due to the possibility of increase in demand for defense equipment in the environment of geopolitical conflict.
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