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NDTV
14-06-2025
- Business
- NDTV
How Israel-Iran Conflict May Affect Oil Prices In India
Israel's surprise airstrikes on Iranian nuclear sites have rattled global energy markets, sending oil prices soaring amid concerns that supplies from the critical West Asia region would be disrupted. The price of benchmark Brent crude surged by over $6 to cross a five-month high of $78 per barrel on Saturday. Higher crude prices mean higher fuel costs and an increase in the cost of freight. The potential negative ramifications for global trade resulted in a sharp fall in US equities too. Iran's airstrikes on Tel Aviv only served to heighten tensions further. Experts anticipate the rise in global tensions to lead to near-term volatility. In fact, the Volatility Index or the VIX, spiked nearly 8% in trade on Friday. While the escalation is bullish for near-term oil and gas prices, analysts at S&P Global Commodity Insights say it is unlikely to sustain price pressure unless it directly disrupts oil exports. "The attack is obviously bullish near term for oil prices, but the key is whether oil exports will be affected. When Iran and Israel exchanged attacks last time, prices spiked, then fell once it was clear the situation wasn't escalating and oil supply was unaffected," Richard Joswick, head of near-term oil analysis at S&P Global Commodity Insights, told news agency ANI. Even though India does not directly import large volumes of oil from Iran, it does import about 80 per cent of its oil requirement. The worry for India is that the Strait of Hormuz, which is located between Iran to the north and the Arabian Peninsula to the south, remains a critical chokepoint, with nearly 20 per cent of global LNG trade and a significant portion of crude exports transiting through the narrow waterway. Any disruption around the Strait of Hormuz, say analysts, may affect oil shipments from Iraq, Saudi Arabia, and the UAE, who are key suppliers for India. Analysts further said any disruption on the route could hurt India's exports in terms of time as well as costs. In the past, Iran has warned of blocking the key route. "There is a risk to LNG supply if Iran retaliates by threatening shipping through the Strait of Hormuz," as per analysts from S&P Global Commodity Insights. While current freight rates for Red Sea transits have remained steady, analysts say heightened conflict could reverse that trend. "Price risk premiums tend to fade unless actual supply is disrupted," said S&P analysts. The longer-term impact on oil and gas markets will depend on whether the conflict escalates into a regional war or remains contained. With OPEC+ announcing another higher-than-expected production hike in July, fundamentally oil markets remain well supplied and further Iranian supply cuts can be accommodated, the Emkay Global, a financial services provider, report states. "Our Energy team maintains a positive view on India's oil market companies on the back of strong marketing margins and core GRMs (gross refining margins) also holding up to $75/bbl Brent for the remaining part of the year. Our estimates don't see downside risks," the report added. For now, markets remain on edge, with every new development carrying the potential to tip the balance.
CNBC
11-06-2025
- Business
- CNBC
Wells Fargo says tariffs to hold back stocks this year, but then sees new highs in 2026
This year could be a washout for the stock market thanks to lofty tariffs, but 2026 could mark a return to new highs, according to the Wells Fargo Investment Institute. President Donald Trump's tariffs will continue to limit upside for equities this year, as corporate earnings come under pressure from higher inflation, constrained profit margins and a slower economy, but investors can start positioning for a recovery that's likely to come next year, wrote Darrell Cronk, president of the investment institute. "Significantly surpassing the equity-market highs reached early this year has likely been delayed by the tariff-related hit to consumer and business sentiment along with the imminent economic slowdown that we expect," Cronk wrote. "Without a recession, we believe the risk of further equity-market downside — beyond lows reached in April — is likely limited while upside reward potential is significant by year-end 2026," he added. .VIX YTD mountain Volatility Index (VIX), year to date. The reasoning behind the Wells Fargo thesis is this: Positive forces expected later this year, such as tax cuts and lower interest rates, in addition to lower oil prices, should offset some of the pressure from higher tariffs, helping the U.S. avoid a recession. What's more, Cronk noted that volatility historically occurs near market bottoms. In 10 comparable periods in the past, he said, when the VIX Index topped 40, the median 18-month forward return for the S & P 500 was 30%. The VIX topped 50 at one point during the April selloff and was last trading above 16. "In real time, the uncertainties can feel so large that it is difficult to look past them, but also in each case households and businesses adjusted, and generally, returns soon followed," he wrote. "In sum, the new tariffs are significant, and uncertainty may persist for some months to come," he continued. "However, we would follow the lesson of history and lean into equities." While near-term returns may remain muted, investors should "lean into the recovery" by allocating toward quality companies, Cronk said. He prefers U.S. large caps and U.S. midcaps, anticipating the U.S. will maintain its status as the global leader both economically and, by extension, in stocks. He also said he favors developed markets excluding the U.S. over emerging markets. "We view further periods of volatility as an opportunity to lean into equities to position for the gains we expect through 2026," Cronk said.
Bloomberg
05-06-2025
- Business
- Bloomberg
Bargain Hunters Scouring For Distressed Sectors May Eye India's Road Developers
Before the trading day starts we bring you a digest of the key news and events that are likely to move markets. Today we look at: Good morning, this is Ashutosh Joshi, an equities reporter in Mumbai. Indian stocks are positioned for a second day of gains, helped by a risk on tone in Asian markets and a sharp decline in volatility index back home. The prospects of ample rainfall could further boost sentiment, benefiting a host of sectors while helping ease inflationary pressures.
Time of India
28-05-2025
- Business
- Time of India
Indices decline over 1% amid global market concerns and profit booking
The Volatility Index or VIX - the market's fear gauge - gained 2.85% to 18.5 on Tuesday, indicating traders expect higher risks in the near term. Indian equity indices experienced a decline of over 1% on Tuesday, influenced by weak global cues and profit-booking in key sectors ahead of the monthly expiry. Despite the downturn, analysts maintain a bullish outlook. Market sentiment was also affected by uncertainty surrounding Donald Trump's tariffs and trade agreements, contributing to investor caution. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Mumbai: India's equity indices fell more than 1% on Tuesday, although the gauges recouped some losses through a choppy trading session marked by weak global cues and profit-booking in heavyweight sectors ahead of the monthly expiry. Analysts said the undertone remains bullish, despite Tuesday's NSE Nifty fell 0.7%, or 174.95 points, to finish at 24,826.20. The BSE Sensex moved 0.8%, or 624.82 points, lower at 81,551.63."The market was jittery amid global nervousness due to lack of clarity on Donald Trump's tariffs, and trade agreements. With the F&O expiry coming up, investors remained cautious," said Siddartha Khemka, Head of Retail Research, Motilal Oswal Financial Services A lack of positive triggers at the tail end of the earnings season on the domestic front also caused the gauges to lose momentum, said Nasdaq Composite Index fell 1% while the Dow Jones Industrial Average declined 0.6%, on Friday. The US markets were closed Monday for the Memorial Day Asia, China and Taiwan fell 0.2% and 0.9%, respectively, while South Korea declined 0.3%. Japan rose 0.5% and Hong Kong rose 0.4%.Analysts said that heavyweight sectors, such as banking, IT and FMCG that together make up almost 60% of the benchmark, witnessed profit booking due to the monthly expiry."The markets were trading lower after testing 25,050 levels during the day and the call concentration and open interest was highest at these levels in Nifty," said Vikas Jain, head of research, Reliance Securities. "The rollover moved up to almost 48% from 35%."The Volatility Index or VIX - the market's fear gauge - gained 2.85% to 18.5 on Tuesday, indicating traders expect higher risks in the near FMCG and IT indices fell 0.9% and 0.8%, respectively, while Bank Nifty moved 0.4% lower. Nifty Auto Index declined 0.7%. The broader market bucked the downtrend and ended higher with the Nifty Mid-cap 150 index advancing 0.21% while the small-cap 250 index ended 0.11% higher. In past week, the mid-cap index and small-cap index rose 1.8% and 1.6%. 'While headline indices witnessed profit-booking due to weak global cues, broader market witnessed good momentum supported by institutional buying in selective sectors,' said Khemka.'IPOs have started coming up which indicates broader market strength.' Out of the 4,084 shares traded on BSE, 1,897 advanced, while 2,053 declined. Foreign portfolio investors (FPIs) bought shares worth a net Rs 348.5 crore on Tuesday. Their domestic counterparts bought shares worth Rs 10,104.6 crore. In May, overseas investors bought Rs 15,132.3 crore. Technical analysts said 24,650 is a key level on the downside and if benchmark Nifty breaches this level, then further corrections are possible till 24,300 levels. However, the momentum is positive.
Yahoo
20-05-2025
- Business
- Yahoo
How To Invest: Use The VIX To Measure Fear And Confirm Key Stock Market Bottoms
The Volatility Index, commonly known as the VIX, can be used to gauge the amount of fear on Wall Street, and help confirm stock market bottoms.
