The Oil’s Reaction to Middle East Tension| Weekly Update Oct 14
Hello Readers!
We hope you had a great week!
The tensions in the Middle East are heated!
The Israel-Hamas conflict is like a big deal in the world of oil. It’s almost as crucial as when Russia got into Ukraine. 😮 Though, for now, the oil flow isn’t messed up by the conflict, two big things might happen if things get worse.
First, if Iran is found to be involved in the attack on Israel by Hamas, the U.S. could get tough on Iran. This could make it harder for them to get and sell oil. That’s a problem because we already don’t have enough oil, which could increase prices. 😟
Second, there’s this plan: the U.S. has to make Saudi Arabia and Israel become friends. If that happens, , Saudi Arabia might make more oil. But if the conflict keeps going, this plan could fall apart. 😬
When the conflict started, the price of oil Brent crude went up to $89 a barrel. That’s a lot! But then it calmed down a bit. This differs from the 1973 oil crisis when prices increased and stayed there. 📈
Iran keeps selling a bunch of oil even with all this trouble. This helps because Saudi Arabia and Russia have decided to sell less oil. But the U.S. is considering putting more sanctions on Iran, which might make it harder for them to sell oil. 😓
Everyone wants things to be calm between Saudi Arabia and Israel. It’s like keeping a promise in a game. But this conflict might mess that up. OPEC+ is a group that helps keep things steady with oil. They say they’ll stick together no matter what. They want to keep the oil market steady with no surprises. 🤝
In short, the Israel-Hamas conflict is causing worries about oil and how things will go. It’s like a giant puzzle with lots of essential pieces.
We are hoping for peace and normalcy soon.
🧾In this Article
📈Market Outlook
–Mr. Ratnesh Goyal, Senior Research Analyst, Arihant Capital.
Nifty
If we look at the daily & weekly chart of Nifty, we observe a series of “Narrow” range body formations. We can see some consolidation within the range if we analyse both chart patterns. If Nifty starts trading above the 19,850 level, then it can touch the 20,050-20,200 level, while on the downside, support is 19,650, and if it starts to trade below, it can test the levels 19,500 and 19,250.
Bank Nifty
Let’s look at the daily chart of Bank-Nifty. We observe prices trading below all key “Short-term term moving averages.” We observe a series of “Narrow” range body formations on the weekly chart. If we analyze both chart patterns, it indicates that the bank-nifty can continue some more. Range-bound trade and can underperform the Nifty. Bank-nifty starts trading above 44,500 and can touch 44,700 and 44,950 levels. However, downside support comes at 44,200; below that, we can see 44,050 and 43,900 levels.
🔎Stocks in News
📈 Glenmark Life Sciences: Declared a dividend of ₹22.5 per share.
💼 TCS: Will consider share buyback at its board meeting on 11 Oct.
🔄 Inox Wind: Inox Green Energy Services will sell a 100% stake in Nani Virani Wind Energy.
💰 Bajaj Finance: Will hold a meeting on 31 Oct to seek approval for ₹10,000 cr fundraising.
🛠️ Sterlite Power: Got orders worth ₹1,300 cr in the April-June quarter.
⚡ Genus Power: Got an order worth ₹3,115.01 cr for smart prepaid meters.
🏠 Purvankara: Recorded ₹1,600 cr sales in the April-June quarter.
📜 Vodafone-Idea (Vi): Filed a curative petition in the Supreme Court regarding its Adjusted Gross Revenue (AGR).
🚢 Mazagon Dock: Bagged an order to build hybrid power vessels for European clients.
✈️ InterGlobe (IndiGo): Will launch direct flights to and from Salem in Oct.
💼 TCS: Approved share buyback of up to ₹17,000 cr at ₹4,150 per share. Declared dividend of ₹9 per share.
🛢️ L&T: Its hydrocarbon business has bagged an onshore project from a client in the Middle East.
💹 MCX: Announced that it plans to launch its new commodity derivatives platform on 16 Oct.
🏦 Bank of Baroda: RBI has stopped the bank from adding customers to its mobile app, citing supervisory concerns.
🏗️ IRCON International, RITES: Have been granted the ‘Navratna’ status by the Government of India.
💸 Adani Enterprises: Raised ₹700 cr through non-convertible debentures.
🚗 Tata Motors: Jaguar Land Rover (JLR) India sold 1,194 vehicles in April-Sept, the highest sales ever.
📰 Quick Bites
📊 India’s retail inflation (CPI) stood at a 3-month low of 5.02% in Sept.
🏭 India’s Industrial output (Index of Industrial Production) grew 10.3% in August, the highest since June
2022.
🍽️ MTR Foods has been renamed as Orkla India.
🚄 RapidX, India’s first rapid rail train, is expected to be inaugurated next week.
🛵 Sales of 3-wheelers in the first half of the ongoing financial year stood at 5.33 lakh units, up 65.66% year-on-year: FADA.
🚨 Indian government is currently testing a disaster alert notification. Phones and broadcast devices receive a test for the same.
💹 SIP investments in Sept 2023 reached an all-time high of ₹16,420 cr vs ₹15,814 cr in Aug. Number of SIP accounts stood at 7.12 cr.
🚀 The Indian space economy is expected to reach $44 billion by 2033, about 8% of the global share: Indian National Space Promotion and Authorisation Centre.
🛢️ The government has approved royalty rates of 3% each for lithium and niobium and 1% for Rare Earth Elements (REEs).
🌱 Sustainability corner
🌿 SBI Mutual Fund launches India’s first ESG ETF. This ETF will track the Nifty India ESG Index, launched by NSE in September 2023.
💸 HDFC Bank raises $500 million in the world’s first ESG-linked loan for a financial institution in India. This loan will fund HDFC Bank’s green and social projects.
🏦 ICICI Bank launches ESG-linked personal loans and home loans. These loans offer lower interest rates to customers who meet specific ESG criteria, such as having a LEED-certified home or an electric vehicle.
💳 Axis Bank introduces ESG-linked savings accounts. These accounts offer higher interest rates to customers who meet specific ESG criteria, such as having solar panels in their homes or using public transportation.
🏭 India Inc. signs up for ESG in a big way. More and more Indian companies are pledging to adopt ESG practices. For example, Reliance Industries has committed to achieving net-zero emissions by 2035. Adani Group has committed to investing $70 billion in renewable energy over the next decade.
🌱 The Indian government is promoting ESG through various initiatives. For example, the government has launched the National Green Hydrogen Mission and the National Electric Vehicle Policy. These initiatives aim to encourage the development of green industries and reduce India’s carbon footprint.
💼 ESG investing is gaining traction in India. More and more Indian investors are investing in ESG funds and companies. For example, assets under management in ESG funds in India have increased from ₹10,000 crore in March 2022 to ₹20,000 crore in March 2023.
🌏 India is attracting foreign investment in ESG. Foreign investors are increasingly looking to invest in ESG-compliant companies in India. For example, in September 2023, Norwegian sovereign wealth fund Norges Bank Investment Management invested ₹1,000 crore in HDFC Bank’s ESG-linked loan.
💡🍬 Knowledge Candy: What is Hindsight Bias?
So, imagine investors considering investing in Reliance Industries Ltd. Some are enthusiastic, citing solid financials, a diversified business portfolio, and promising future projects as reasons to invest.
Others might hesitate due to concerns about regulatory changes, market volatility, or global economic conditions. ⚠️
As time progresses, the stock price of Reliance Industries Ltd. starts to rise significantly. Those who invested and saw their investments grow may say, “I knew Reliance Industries was a solid choice because of their financial strength and diverse business ventures.”
On the other hand, those who didn’t invest might experience hindsight bias, thinking, “I should have predicted this. The signs were clear – a solid financial track record and strategic expansions 😔🤦♂️
This bias can mislead people into believing that the outcome was evident from the beginning when, in reality, it was uncertain. The future of stock prices is unpredictable, and before the surge, it was challenging to foresee the exact outcome. Different investors had different perspectives and analyses. 🎭
Hindsight bias teaches us the importance of recognizing that predicting the stock market is difficult. It’s crucial to base our decisions on the information available at the time and not beat ourselves up for not accurately predicting the future.
Investing involves managing risks and making informed choices in an uncertain financial landscape. 🛡️🤔
Hope you like it!
Happy reading!
Also Read: How to Trade Above Freeze Quantity in Options on Arihant Plus?
