Here are some stocks to watch as tensions between Israel and Iran keep increasing.
Effects of Iran-Israel Conflict on Stock Market.
This morning, the Sensex and Nifty, two major Stock Market Indices in India, both fell by about 1% because of increased tensions in West Asia, which made investors more cautious. Despite the recent strong performance, experts predict that the stock market might not see much growth in the coming days as companies in India start sharing their financial results for the fourth quarter and as voting for the Lok Sabha election approaches.
The Sensex dropped by 731 points to 73,502, a decrease of 0.9%, and the Nifty fell by 230 points to 22,289, a decrease of 1%. The smaller company indices, the Nifty Midcap 100 and Nifty Smallcap 100, also saw significant declines of up to 3%.
Stocks to Watch as Tensions Between Israel and Iran Escalates.
Here are some stocks to watch as tensions between Israel and Iran grow.
1. Adani Ports:
Adani Ports owns the Haifa port in northern Israel. It completed the purchase in January 2024 for about US$ 1.03 billion and operates the port with a local partner. Although the war has not yet impacted the port in any way, a broader escalation in the conflict could make critical infrastructure within Israel, such as this port, a potential target.
2. Sun Pharma:
Sun Pharma’s subsidiary, Taro, is based in Israel. If the war leads to some employees being drafted for military service, it might slightly affect production, but it probably won’t have a major impact on Sun Pharma’s overall consolidated financials.
3. OMC Stocks:
If the conflict between Iran and Israel escalates, crude oil prices might increase, possibly reaching $100 per barrel soon. This could impact the stock prices of Oil Marketing Companies (OMCs) like Hindustan Petroleum Corporation (HPCL), Indian Oil Corporation (IOCL), and Bharat Petroleum Corporation (BPCL).
These stocks might experience more fluctuations because higher crude prices can squeeze their profit margins and also require them to spend more on importing crude oil, increasing their working capital needs.
4. Paint Stocks:
When crude oil prices rise, it negatively affects the paint industry because their main raw materials are derived from crude oil, and these companies can’t control these costs.
If conflicts in the Middle East cause crude oil prices to exceed $100 per barrel, stocks of paint companies such as Akzo Nobel India, Berger Paints, Indigo Paints, and Shalimar Paints might face challenges. This is because almost 40 percent of their manufacturing costs come from crude derivatives. Higher crude prices could lead to smaller profit margins for these companies.
5. Tyre Stocks:
The Tyre industry relies on crude oil derivatives to make synthetic rubber, so tyre companies like MRF, CEAT, Apollo Tyres, JK Tyres, and Goodyear Tire & Rubber India will be closely watched. If crude oil prices go up, it could reduce their profit margins.
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