Quote on Impact of Rising Crude Prices on India`s Economy and Stock Market from Dr. V K Vijayakumar, Geojit Financial Services.
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Below the quote on Impact of Rising Crude Prices on India's Economy and Stock Market from Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"Rising crude prices positively impact oil exporters and negatively impact oil importing countries like India. Every 10 dollar rise in Brent crude prices widens India’s Current Account Deficit by 0.5%. Consequently this depreciates the INR and leads to imported inflation. Also rising crude prices impact the profit margins of companies that use oil as input. So, the impact on the stock market will be negative. But now in India the markets are ignoring the rising crude prices. The reason is that the positive impact of good GDP growth, decent corporate earnings and sustained fund flows to the market is neutralising the negative impact of rising crude. The situation might change if Brent crude rises to $100."
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