Nilesh Shah says triple-digit oil or supply shock can damage Indian equity

As global geographical political tensions increase and crude oil prices rise, Nilesh Shah, managing director of the Kotak Mahindra Asset Management Company, has warned that a sharp increase in crude oil or supply disruption can negatively impact Indian equity markets.

“The Indian equity and rates market is like a man with an average temperature because one foot is in cold water and the other is in hot water,” Shah said using a metaphor to highlight the current disruption between domestic and global signals.

According to him, local factors continue to support the current valuation, making Indian equity attractive for long -term investors expecting moderate returns. However, he flagged global concerns – the US As a threat from policy actions to the uncertainty of the oil market.

“Global factors from Trump policy to oil prices/supply are hot,” he said.

The warning has led to dramatic growth in the Israel-Iran conflict. The United States launched an air attack on three key Iranian nuclear facilities -for the weekend -a compiled air attack on Natenz and Asphan, confirming that the “full payload of bomb” confirmed that the “full payload of the bomb” has been left at the primary target. He added that all the aircraft involved were safely out of Iranian airspace.

US involvement in efforts to eliminate Iran’s nuclear structure marks significant growth. Iran has taken a response to revenge .As, which fears widespread conflict in the Middle East. In response, the US has also launched a flight to evacuation from Israel.

“We need to keep an eye on the availability of oil as well as its prices. Oil prices will have the opposite effect on triple digits or exceeding restricted supply,” Shah said that despite healthy FX reserves, India’s import oil is noted.
Brent crude has reached more than 15% $ 77 per barrel, while WTI crude has risen 17% in the last eight trading sessions .974.9

In the midst of this uncertain atmosphere, Shah advised the traders to be careful but the more optimistic tone was struck for long -term investors.

He added, “Traders should be extremely cautious. Investors should use correction as an opportunity to gather.”

Also Read: US Strikes on Iran in May Rattle Markets: Will the Nifty, the Sensex will react to a geographical political risk?

(Disclaimer: The views given by recommendations, suggestions, opinions and experts are their own. This does not represent the views of the economic time)