Latest news with #NarendraSolanki
News18
4 days ago
- Business
- News18
Israel-Iran War: Has Nifty Already Priced In Middle East Tensions? Experts Analyse
Last Updated: Experts believe that while the current escalation has not yet crossed a threshold to warrant a full-blown market correction Israel-Iran Conflict: Indian benchmark indices, Sensex and Nifty, traded on a subdued note Wednesday amid escalating missile strikes between Iran and Israel, prompting investors to tread cautiously. As of 11:40 AM, the BSE Sensex was down 310 points or 0.38% at 81,272.93, while the NSE Nifty50 slipped 80 points or 0.32% to 24,774.30. Market experts suggest that investors may have already priced in the geopolitical risks from the Israel-Iran conflict. Monday's strong market close indicates a shift in investor attention toward domestic growth drivers and corporate fundamentals. Middle East Tensions: Has the Market Priced In the Israel-Iran Conflict? According to Anubhav Sangal, Senior Research Analyst at Bonanza Portfolio, the Indian stock market seems to be factoring in a limited conflict scenario rather than a prolonged regional war. 'The market has partially discounted the Israel-Iran conflict, reflecting both vulnerability and resilience. While initial reactions triggered volatility and sectoral churn, the overall discounting remains incomplete and highly conditional," he noted. Narendra Solanki, Head Fundamental Research – Investment Services, Anand Rathi Shares and Stock Brokers, 'We believe markets have partially priced in the Iran conflict in the sense that it has taken cognisance of the conflicts, but the final outcome is still unknown and hence not priced. Believe markets are still wishful/hopeful of some kind of de-escalation coming in few days and may not have priced for any serious escalation or a potential catastrophic threshold involving US directly for the region." Analysts estimate that crude prices have jumped about 10% so far, and further escalation could push them up another 8–9%. 'Israel's airstrikes on Iran have sparked fears of supply chain disruptions. The market is anxiously watching how Iran will respond. Any retaliation could send prices soaring and push the region into a deeper crisis," said Navneet Damani, Group Senior VP and Head of Commodities Research at Motilal Oswal Financial Services. Gold, meanwhile, has rallied to an all-time high of Rs 1 lakh in the domestic market and is nearing $3,500 per ounce globally, as investors shift towards safe-haven assets amid the growing geopolitical uncertainty. What Should Be Your Trading Strategy? Experts believe that while the current escalation has not yet crossed a threshold to warrant a full-blown market correction, further deterioration could lead to significant downside. Traders are advised to maintain a cautious stance, stay hedged, and keep a close watch on geopolitical developments, as volatility could spike sharply if tensions worsen. Anubhav Sangal of Bonanza recommends investors to treat geopolitical dips as buying opportunities. ' For now, markets are treating geopolitical dips as buying opportunities, supported by India's strong domestic fundamentals and limited direct exposure to the conflict zone," he said.
Time of India
6 days ago
- Business
- Time of India
How will the surge in crude oil prices affect various sectors?
The latest surge in global prices of crude oil, unless short-lived, may potentially affect profitability of companies in the select sectors that either process it to produce finished products or consume intermediates derived from it. Companies in the sectors including crude oil refining, paints, aviation, automobiles, petrochemicals and fertilisers are expected to be affected by the rapid increase in crude prices whereas those in the business of oil production or upstream companies and companies in the electric vehicles (EV) segment may benefit depending upon the government's policies. Brent crude futures jumped 7per cent to settle at $74.23 per barrel on Friday, after briefly soaring over 13per cent to touch an intraday high of $78.50, as fears of supply disruption due to escalating tension between Israel and Iran rattled energy markets. Since India imports over 85per cent of the crude oil requirement, a sustained rise in oil prices may result in broader inflationary pressures. However, the exact impact hinges on how long prices remain elevated. "It is too early to fully gauge the impact. A prolonged spike could put significant pressure on corporate margins," said Narendra Solanki, fundamental research head, Anand Rathi Shares and Stock Brokers. He added that if prices retreat soon, the effect on companies will be minimal. "We lift our three-month price target to $72.5, while our view and long term targets remain unchanged at Neutral and $60," said Norbert Rucker, head economics, Julius Baer, in an email quote citing that structural setting of the oil market should remain unscathed. Oil Marketing Companies (OMCs): Margin pressure looms Companies such as Indian Oil Corp , BPCL , and HPCL may face shrinking margins. While higher crude oil prices raise refining costs, OMCs may not be able to fully pass on the impact to end users, leading to potential under-recoveries and profit erosion. Oil & Gas Producers: Beneficiaries of the surge Upstream companies such as ONGC and Oil India sell domestically produced crude at prices linked to global benchmarks. While sustained rally in oil prices potentially improve their realisations, the effect on their revenues, and profit margins will depend upon the government's stance. For instance, it levied a windfall tax on profits of oil producers between July 2022 and December 2024 when crude prices rose due to the Russia-Ukraine conflict. Aviation: Soaring fuel bills Aviation turbine fuel (ATF) or jet fuel, derived from crude, forms over one-third of an airline's operating cost. A rise in crude prices inflates fuel expenses, putting pressure on the bottom lines of carriers. Airlines may respond by increasing fare, but at the risk of dampening demand in a price-sensitive market. Paints: Costs could dull profitability Paint manufacturers like Asian Paints , Berger Paints , and Kansai Nerolac depend on crude derivatives such as solvents and resins, which form nearly 50per cent of total costs. Rising crude prices could force companies to increase retail prices, potentially hurting demand and market growth. Chemicals & Petrochemicals: Feedstock woes Naphtha, ethane, propane, and other crude derivatives are essential feedstocks for producing plastics, synthetic fibres, solvents, and a vast array of chemicals. Raw material cost is nearly half of the total revenues for chemical and petrochemical firms. Companies like Pidilite , SRF , Aarti Industries , and Deepak Nitrite will face a surge in raw material costs if crude prices stay elevated for a longer period. Fertiliser companies: Energy cost overhang The production of nitrogen-based fertilisers, particularly urea and ammonia, depends on natural gas and oil as feedstock. Rising crude often pulls up LNG (liquefied natural gas) prices, making fertiliser production more expensive. This could lead to higher retail prices and a larger subsidy burden for the government. Automobiles: Input costs up, electric vehicles get a boost Automobile manufacturers may witness a rise in costs due to more expensive plastics, rubber, and composites-all derived from petroleum. While this could put pressure on the profit margins of traditional automakers, the surge in fuel prices could enhance the appeal of electric vehicles (EVs), giving the manufacturers of electrics a relative advantage.
Time of India
6 days ago
- Business
- Time of India
How will the surge in crude oil prices affect various sectors?
ET Intelligence Group: The latest surge in global prices of crude oil, unless short-lived, may potentially affect profitability of companies in the select sectors that either process it to produce finished products or consume intermediates derived from it. Companies in the sectors including crude oil refining, paints, aviation, automobiles, petrochemicals and fertilisers are expected to be affected by the rapid increase in crude prices whereas those in the business of oil production or upstream companies and companies in the electric vehicles (EV) segment may benefit depending upon the government's policies. Brent crude futures jumped 7% to settle at $74.23 per barrel on Friday, after briefly soaring over 13% to touch an intraday high of $78.50, as fears of supply disruption due to escalating tension between Israel and Iran rattled energy markets. Since India imports over 85% of the crude oil requirement, a sustained rise in oil prices may result in broader inflationary pressures. However, the exact impact hinges on how long prices remain elevated. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Affordable Apartments for Rent in Azemmour Apartments for rent | Search Ads Learn More Undo "It is too early to fully gauge the impact. A prolonged spike could put significant pressure on corporate margins," said Narendra Solanki, fundamental research head, Anand Rathi Shares and Stock Brokers. He added that if prices retreat soon, the effect on companies will be minimal. "We lift our three-month price target to $72.5, while our view and long term targets remain unchanged at Neutral and $60," said Norbert Rucker, head economics, Julius Baer, in an email quote citing that structural setting of the oil market should remain unscathed. Oil Marketing Companies (OMCs): Margin pressure looms Live Events Companies such as Indian Oil Corp , BPCL , and HPCL may face shrinking margins. While higher crude oil prices raise refining costs, OMCs may not be able to fully pass on the impact to end users, leading to potential under-recoveries and profit erosion. Oil & Gas Producers: Beneficiaries of the surge Upstream companies such as ONGC and Oil India sell domestically produced crude at prices linked to global benchmarks. While sustained rally in oil prices potentially improve their realisations, the effect on their revenues, and profit margins will depend upon the government's stance. For instance, it levied a windfall tax on profits of oil producers between July 2022 and December 2024 when crude prices rose due to the Russia-Ukraine conflict. Aviation: Soaring fuel bills Aviation turbine fuel (ATF) or jet fuel, derived from crude, forms over one-third of an airline's operating cost. A rise in crude prices inflates fuel expenses, putting pressure on the bottom lines of carriers. Airlines may respond by increasing fare, but at the risk of dampening demand in a price-sensitive market. Paints: Costs could dull profitability Paint manufacturers like Asian Paints , Berger Paints , and Kansai Nerolac depend on crude derivatives such as solvents and resins, which form nearly 50% of total costs. Rising crude prices could force companies to increase retail prices, potentially hurting demand and market growth. Chemicals & Petrochemicals: Feedstock woes Naphtha, ethane, propane, and other crude derivatives are essential feedstocks for producing plastics, synthetic fibres, solvents, and a vast array of chemicals. Raw material cost is nearly half of the total revenues for chemical and petrochemical firms. Companies like Pidilite , SRF , Aarti Industries , and Deepak Nitrite will face a surge in raw material costs if crude prices stay elevated for a longer period. Fertiliser companies: Energy cost overhang The production of nitrogen-based fertilisers, particularly urea and ammonia, depends on natural gas and oil as feedstock. Rising crude often pulls up LNG (liquefied natural gas) prices, making fertiliser production more expensive. This could lead to higher retail prices and a larger subsidy burden for the government. Automobiles: Input costs up, electric vehicles get a boost Automobile manufacturers may witness a rise in costs due to more expensive plastics, rubber, and composites-all derived from petroleum. While this could put pressure on the profit margins of traditional automakers, the surge in fuel prices could enhance the appeal of electric vehicles (EVs), giving the manufacturers of electrics a relative advantage.
Economic Times
27-05-2025
- Business
- Economic Times
Narendra Solanki on where he is overweight and where underweight in current market
Narendra Solanki, Head Fundamental Research-Investment Services, Anand Rathi Shares, says the market remains stock-specific, with a positive outlook on banks, particularly public sector banks, and financials. FMCG, durables, consumer discretionary, and defence sectors also show promise, driven by strong order expectations. Domestic manufacturing, especially electronics, and the hospital segment within pharma are attractive, while in auto, two-wheelers like M&M, TVS Motor, and Hero MotoCorp are favoured. ADVERTISEMENT Guess all things are pointing towards a buoyant market move. It has been a decent earnings season and now there is the early onset of monsoon as well. Narendra Solanki: Yes, definitely. The earning season is almost over and few macro data points have also panned out to be right, especially the monsoons, the inflation environment, and the rate cut environment. These three along with the announcements in the Budget would definitely cheer up the festival season and the demand is likely to pick up in these segments for the next two to three months. Banking, financials set to lead next leg of market rally: Ajit Mishra The market has definitely given a thumbs up to all that and the overall mood is also optimistic for the market, especially on the revival of both rural and urban demand. All the sectors catering into these segments have been trading in a very optimistic manner. What is the analysis of the earning season so far? What has managed to stand out? Where are you overweight and where are you underweight? Narendra Solanki: The earning season was largely on expected lines and the market currently is still a stock specific market and on a sector basis, we are positive on banks and financials. Among banks, we favour public sector banks in comparison to private sector banks as a basket. Apart from financials, we are positive on FMCGs, durables, as well as consumer discretionary segments. On defence also, we are very positive. However, some stocks may appear to be highly richly valued but looking at the kind of orders which are expected to come in, the valuations were also somewhat good for those kinds of stocks. So, defence is also looking very good for a medium to long-term perspective. Overall, the domestic manufacturing space, especially electronic manufacturing space (EMS), which has corrected somewhat, is also looking attractive. Overall, the domestic economic environment and domestic involved manufacturing companies are looking very good. In pharma, we are more positive in the hospital segment rather than the pharmaceutical companies or drug companies. In auto, we are more positive on two-wheelers' entry space, the likes of M&M, TVS Motor and Hero MotoCorp rather than the passenger vehicle segment. These are our sectoral bets. ADVERTISEMENT (You can now subscribe to our ETMarkets WhatsApp channel)
Business Recorder
14-05-2025
- Business
- Business Recorder
India's benchmarks inch higher as tech, metal stocks gain
India's benchmark indexes ended higher on Wednesday, helped by a rise in information technology stocks on easing U.S. recession fears and in metals companies as the U.S. dollar weakened. The Nifty 50 rose 0.36% to 24,666.90 and the BSE Sensex gained 0.22% to 81,330.56. They had risen about 0.7% earlier, before trimming gains. 'There will be instances of profit taking in the very near term as hot FPI (foreign portfolio investors) money is likely to move to China due to the U.S.-China trade truce,' said Narendra Solanki, head of research at Anand Rathi. Financials, which have relatively higher FPI ownership than other sectors, dropped 0.23% on the day. Still, ten of the 13 major sectors advanced on the day. The overall outlook for domestic markets remains positive, as cooling domestic inflation will allow the central bank to ease interest rates further, and that, in turn, will boost both economic growth and corporate profits, Solanki said. India's retail inflation slowed to a near six-year low on Tuesday. Indian stocks log best day in 4 years on border truce; Pakistan shares surge IT companies, which get a significant chunk of their revenue from the United States, gained 1.34%. The low probability of a U.S. recession due to easing trade worries makes IT a good play as valuations are reasonable, said Jaykrishna Gandhi, head of business development of institutional equities at Emkay Global Financial Services. A drop in the dollar due to benign U.S. inflation data and easing trade tensions also boosted metal stocks by 2.46%. Tata Steel surged 3.93% with multiple brokerages highlighting strong volume growth and cost optimisation as key positives for the company. The broader small-cap and mid-cap indexes rose 1.44% and 1.11% each. Anand Rathi's Solanki said that was mostly as certain key constituents gained after posting upbeat results.
