India's stock market is likely to see a gap-down open on Monday as the Iran war delivers a crude shock for the world's fourth largest economy.
Expect elevated volatility amid global risk-off sentiment, analysts said. Oil marketing companies, including Indian Oil Corp. Ltd., as well as makers of paint, tyres and chemicals, are likely to come under margin pressure due to higher input costs.
Upstream oil producers such as ONGC Ltd. and Oil India Ltd. may benefit from stronger realisations, while defence firms such as Bharat Electronics Ltd. and Hindustan Aeronautics Ltd. could see sentiment support.
Every $1 increase in crude oil prices raises India’s annual import bill by $2 billion, leading to a weaker rupee, higher inflation, and eventually compressing equity multiples.
The Organization of Petroleum Exporting Countries has announced an increase in crude oil production from April, but the Strait of Hormuz, which delivers roughly 50% of India's crude oil imports, is choked.
