New Delhi, April 5 (IANS) The Middle East skirmishes have pushed up Brent crude to $91 and if oil continues to rise that can pose macro headwinds for India, says V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. Headwinds which have the potential to impact equity markets have emerged due to geopolitical tensions and concerns about Federal Reserve rate cuts.
Vijayakumar pointed out that amidst the market weakness, banking stocks provide opportunities to buy, especially with positive data regarding deposit and loan growth from banking majors like HDFC Bank. The trends from small finance banks also indicate a healthy outlook for the sector.
Deepak Jasani, Head of Retail Research at HDFC Securities, mentioned that crude oil extended gains following Israeli Prime Minister Benjamin Netanyahu’s remarks about operating against Iran. This has added to the geopolitical tensions which have led to a negative sentiment in Asian shares and US stocks.
On Friday, BSE Sensex is trading at 74,204 points, down 22 points. L&T, Bajaj Finance, and Ultratech Cement are among the stocks which have declined more than 1 per cent. The uncertain interest rate scenario and geopolitical tensions have contributed to the market volatility, with fears about the Federal Reserve’s ability to cut rates this year.
“It is possible that the exuberant Indian investors and DIIs flush with money may ignore the headwinds and buy the dips, imparting resilience to the market,” Vijayakumar added. The US jobs data released on Friday will provide further insight into the potential impact of these factors on the equity markets.
