Gulf crisis, crude oil price to shape stock market sentiment this week
This is sentimentally negative for domestic tyre players as they use crude derivatives as their major raw materials
As investors continue to monitor shifts in global crude oil prices, geopolitical developments, and significant economic data releases, the Indian stock market is expected to remain cautious and uncertain throughout the week.
Many analysts have pointed out that the primary factors influencing stock markets this week will be the developments pertaining to the ongoing crisis in West Asia and its impact on crude oil prices, as per the report by PTI.
SVP, Research, Religare Broking Ltd, feels that this week the movements in global crude oil prices and further geopolitical developments in West Asia will remain critical external variables influencing market direction.
The week will also feature key macroeconomic releases that could shape near-term sentiment, it stated. "On the domestic front, investors will closely monitor the Consumer Price Index (CPI) inflation data scheduled for March 12," the report added.
On Friday 6 March, the Sensex declined 1,097 points, or 1.37 per cent, to settle at 78,918.90. Meanwhile, the Nifty plunged 315.45 points, or 1.27 per cent, to end at 24,450.45. Not only this, but the developments in West Asia will also affect many sectors in India.
According to ICIC Direct report, the ongoing geopolitical tension in the middle has led to sharp up-move in crude prices. This is sentimentally negative for domestic tyre players as they use crude derivatives as their major raw materials. Therefore, prolong sustenance of such high crude prices will potentially lead to decline in gross margins for tyre players.
Likewise, the West Asia conflict is also negative for export heavy industries as it can potentially lead to higher shipping costs due to disruption of key shipping routes.
While the Indian pharma exports remain resilient, the ongoing conflict creates near-term logistics and cost headwinds, particularly across West Asian transit routes.
With West Asia and North Africa contributing 5.7 percent (US$1.75 billion) of FY25 exports, companies may tweak shipment schedules and inventory to stay on track.
Prolonged disruption could pressure margins due to rerouting, delays, and higher freight costs, though the impact is likely temporary and partly shared across the value chain, the report added.
