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What $100 crude oil means for India: Market & sectoral outlook with Dr Mukesh Jindal
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Current Account Deficit (CAD) increases by 0.5%
Fiscal deficit rises by 0.3%
Inflation and currency pressure mount
Includes exchanges, AMCs, wealth managers, depositories
Supported by India's long-term financialization and digitalization trends
Sector expected to grow 20–25% annually for the next decade
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As global tensions rise and crude prices swing, how should Indian investors read the market? In this exclusive chat with ETMarkets' Neha Vashishth, Dr. Mukesh Jindal of Alpha Capital explains what's driving the volatility, which sectors to watch, and why domestic investors now hold the real power in Indian few weeks were critical. The Iran-Israel conflict unexpectedly disrupted the strong rally we've seen since April 7. Over the last two months, markets surged 15–20% due to factors like the Trump tariff issue easing, RBI and global rate cuts, and strong capex push by the Indian the Iran-Israel crisis came as a surprise and could have far-reaching consequences. Iran is the fifth-largest crude oil producer. A prolonged conflict could impact crude prices, which directly affects emerging markets like India, where we import 80% of our crude crude oil crosses $90 or shipping in the Persian Gulf is blocked, we could see prices spike to $100. So far, Brent is near $75-80. It has risen 30% since April and 10% last week alone. Historically, markets react sharply in the initial days of a crisis but tend to bounce back, if the conflict doesn't escalate are tragic, but one sector that gains from geopolitical tensions is defence. In India, defence stocks have surged, the defence index is up 50% in 3 months and 4x in the last 2 government's push for domestic defence manufacturing is key. We've moved away from heavy imports to building our own systems. Defence exports are rising, and there's global demand for Indian missiles and the only challenge is valuation; the defence index trades at a PE of 75. So, I'd recommend looking at this sector for the long term and using corrections as entry Paints , Tyres: Crude is a key raw oil companies (like BPCL, Indian Oil ), Margins get oil companies (like ONGC ) benefit as selling prices & IT: These are export-oriented. A weaker rupee makes them attractive. Pharma also remains defensive in The repo rate is now at 6.25%. This was a surprise — the market expected only a 25 bps cut. RBI had been hawkish for too long, keeping rates high even as inflation was falling. Now, with CPI at just 2.82%, there's room for more – Lending becomes cheaper; credit growth improvesConsumers – Loans for housing and personal needs increaseHowever, some caution:NIMs (Net Interest Margins) may and personal loans show rising NPAs. RBI has flagged to strong private banks and NBFCs with healthy balance sheets and low NPAs. Valuations are still attractive in parts of this out for:Airlines, tyres, paints, and margins get hit when crude crosses $ crude stays below $80, the impact is and profit growth have competition from private/unlisted brands is hurting listed FMCG disruption in two-wheeler and four-wheeler Ola Electric's struggles after early a selective investment The dynamic has changed drastically in the last 10–15 years. Earlier, markets were FII-driven. Now, mutual fund SIPs, around ₹27,000 crore/month, are the 'hand of God' for Indian in volatile domestic participation, expected to last for the next 10–15 fact, if SIP flows weren't so strong, the market might have corrected 40–50% between Oct 2024 and Feb 2025, when FIIs sold ₹3 lakh crore. But we only saw a 15% equity mutual fund AUM as % of GDP is just 7%, compared to 30% globally, and 72% in the U.S. The runway for growth is we must keep an eye on:US deposit rates are ~4.5%, dollar borrowing costs ~9–10%.This hurts exports, FII inflows, and global cuts globally will be crucial for is the world's 5th-largest oil the conflict escalates, oil supply disruptions could spike prices, hurting global fears have eased, but 10% base tariffs continues as Trump's policy direction is index has fallen from 110 to 98.A weaker dollar supports emerging markets like India.: I would have picked defence, but current valuations (PE of 75) are my top pick is Capital Markets:With RBI cutting rates and FD returns going down, more money will flow into equities. Capital market companies are positioned to benefit massively.
