(LiveMint)
The spike in Brent crude prices could cause a major headwind for Indian markets and upset the country’s macroeconomic balance in financial year 2019. Oil rose above $75 a barrel on Tuesday to its highest since November 2014, supported by production cuts led by the Organization of the Petroleum Exporting Countries (Opec), strong demand and the prospect of renewed US sanctions on Iran.
Brent crude prices have surged 11.92% so far this year. Analysts said rising crude prices may hurt the margins of Indian companies amid growing expectations of an earnings revival spurred by consumption in rural sectors. According to Ravi Gopalakrishnan, head of equities at Canara Robeco Mutual Fund, the rise in crude prices will definitely impact the raw material supply chain of many manufacturing companies as India imports a major portion of its crude requirements.
