The latest developments, particularly the escalation involving Israel and Iran, have resulted in market jitters, pushing shares of companies with Israeli connections into the spotlight.
Adani Ports shares take a hit
Adani Ports, a key player in India’s infrastructure sector, has been impacted by the war’s economic ramifications as the shares fell by 3% today, to a day’s low of Rs 1,402 on the BSE.
This may be due to the company’s exposure to the region, especially through its ownership of Haifa Port in Israel. While the company had clarified that Haifa’s contribution to its overall business is relatively small, investors seem wary of the heightened geopolitical risks.
Other key stocks affected
Bloomberg data points out that Indian companies across various sectors are feeling the heat of the Middle East tensions. Companies like Tata Consultancy Services (TCS), Wipro, Tech Mahindra, and Infosys, along with State Bank of India (SBI) and Larsen & Toubro (L&T), all have significant business interests in Israel. However, these stocks have witnessed muted performance.
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Sun Pharmaceutical, which holds a majority stake in Israel’s Taro Pharmaceutical, along with generic drugmakers Dr. Reddy’s and Lupin, are also in focus due to their connections with Teva Pharmaceutical, the sector leader based in Tel Aviv.Bloomberg data revealed that miner NMDC, along with jewellers Kalyan Jewellers and Titan, also have ties to Israel.Also read: Is Friday the 13th truly unlucky for Nifty bulls? A look at historical trends
Oil price surge and its impact on OMCs
Other than these 14 stocks, the most immediate and visible impact has been on the oil and gas sector. Brent Crude prices surged over 12% following Israel’s military actions against Iran, which escalated tensions in the Middle East.
The rising crude prices are a major concern for oil marketing companies (OMCs), as they are expected to face higher input costs. The market is keeping a close watch on companies like Indian Oil Corporation (IOC) and Bharat Petroleum (BPCL), which have seen sharp movements in their share prices due to the oil price surge.
However, oil-producing company, Oil and Natural Gas Corporation’s (ONGC) shares witnessed a 3% surge in today’s session.
Outlook for the market
On Friday, Israel initiated extensive airstrikes on Iran, targeting nuclear facilities, ballistic missile factories, and military commanders as part of a prolonged operation aimed at preventing Tehran from developing an atomic weapon.
In retaliation, Iran launched approximately 100 drones towards Israeli territory, which Israel is currently attempting to intercept, according to Israeli military spokesperson Brigadier General Effie Defrin.
Since India relies on imports for over 80% of its crude oil needs, a conflict between Iran and Israel could lead to a spike in Brent crude prices.
“Iran holds about 9% of the world’s oil reserves, and any disruption could impact several key Indian sectors, including oil marketing companies (such as BPCL, HPCL, and IOC), paints (like Asian Paints and Berger Paints), as well as the automobile and cement industries,” said Naveen Vyas, Senior Vice President at Anand Rathi Global Finance.
He said that these sectors may experience demand slowdown or margin pressure if tensions escalate and persist for more than 3–6 months, particularly if Brent crude prices rise above the USD 82–85 per barrel mark.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
