New Delhi: Stock market expert Sunil Shah has said that India is likely to emerge as the biggest beneficiary of the recent decline in global crude oil prices, amid growing indications that tensions in West Asia could ease in the coming weeks.
Shah’s comments came as Indian equity markets witnessed a strong rally on Monday, driven by optimism surrounding falling energy prices and reports of progress in US-Iran negotiations.
According to Shah, the cooling of crude oil prices following diplomatic developments between the United States and Iran is highly favourable for the Indian economy, which remains heavily dependent on energy imports.
Lower Oil Prices to Support Growth and Consumption
Shah explained that concerns regarding corporate earnings and economic growth could ease significantly if crude prices continue to decline.
“The fundamental driver for the market is crude oil prices. The lower the price of crude, the stronger the markets are likely to become,” he said.
He added that reduced energy costs would help control inflation and improve domestic consumption, creating favourable conditions for economic expansion.
“Lower fuel and energy prices mean consumers will have greater spending power. That allows the economy to grow without facing severe inflationary pressures,” Shah noted.
Crude Prices Fall Amid US-Iran Developments
Global crude oil prices dropped sharply at the beginning of the week, falling by more than five percent and dipping below the $99-per-barrel mark.
The decline followed reports that Iran had, in principle, agreed to reopen the Strait of Hormuz and address issues related to its highly enriched uranium stockpile as part of ongoing negotiations with the United States.
Market analysts believe the easing geopolitical tensions have reduced fears of supply disruptions in global energy markets.
No Immediate Need for Further Fuel Price Hikes
Shah also stated that the recent increase in domestic fuel prices had been anticipated by the markets and suggested that additional hikes may not be necessary if international crude prices remain stable.
“If global crude prices continue to correct, there should be no requirement for further fuel price increases,” he said.
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