The Indian stock markets remained resilient in the wake of the Israel-Hamas conflict on Monday, without witnessing any panic sell-offs. However, the intensifying dispute in the Middle East has shifted attention toward various Indian companies that have operations in Israel or are otherwise exposed to the war-hit country.
Shares of Sun Pharma are likely to be weighed down as its subsidiary Taro Pharmaceuticals is an Israel-based company. Taro Pharma has stated that terrorist acts could result in disruptions to its business. Other Pharma majors like Dr Reddy’s, Lupin, and Torrent Pharma also have an exposure to Israel on account of exports.
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Adani Ports, which operates the Haifa port in Israel is also under pressure, with the stock falling nearly 5 percent on October 9. The Gautam Adani-led group firm said it is closely monitoring the action on ground and is prepared with a business continuity plan. The overall contribution of Haifa in APSEZ’s numbers is relatively small at 3 percent of the total cargo volume.
Tata Consultancy Services (TCS) has several big-ticket projects, including government ones, in Israel. The IT major has over 1,000 employees in the country, and is closely monitoring the safety of its employees currently stranded in Israel, it said.
Oil marketing companies (OMC) including Indian Oil Corporation (IOC), Hindustan Petroleum Corporation, and Bharat Petroleum Corporation Limited remain in the spotlight as escalated geopolitical tension can lead to crude oil supply disruption from the Middle East.
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Price impact
The Israel-Palestine crisis may lead to a sharp rebound in crude prices and related stocks including ONGC, Oil India, Mahanagar Gas, Reliance Industries. Castrol India, which manufactures and markets automotive and industrial lubricants, may see some movement.
When crude oil prices go up, the paints sector gets badly hit as crude oil derivatives are the main ingredients used in making paints. These companies have no control over these input prices. The Israel-Hamas war has the potential to keep crude oil prices higher for longer, and this would be unfavourable for companies like Asian Paints, Berger Paints, IndiGo Paints, Kansai Nerolac Paints.
Companies like NMDC, Kalyan Jewellers, Infosys, Tech Mahindra, and Wipro, with operations in Israel, could also see impacts on their market performance.
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On the flip side, Archean Chemicals stock may get a boost as the ongoing Israel-Palestine conflict is expected to drive up bromine prices, due to the anticipated slowdown in bromine production in the Dead Sea region bordering Israel and Jordan. This situation could benefit other bromine producers including Archean Chemicals, according to IIFL Securities.
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