Breaking Update: Here’s a clear explanation of the latest developments related to Breaking News:Stocks to Watch for March 2: Oil Sensitives, Tourism Stocks, Gold Financiers, Tata Motors CV, and more– What Just Happened and why it matters right now.
1 / 7Oil Sensitives | Stocks sensitive to movement in crude oil prices will be the most important ones to monitor on Monday as crude is most likely to surge following the US attack on Iran, the death of Iran’s Supreme Leader Khamenei as confirmed by the state media, and the reported closure of the Strait of Hormuz, which is a key oil supply point. A rise in oil prices is positive for upstream oil explorers like ONGC and Oil India, as every one dollar rise in prices boosts their annual revenue by ₹300 crore to ₹400 crore. On the flip side, rising oil prices are negative for India’s downstream oil refiners, HPCL, BPCL and Indian Oil, as every one dollar rise in prices could impact their EBITDA by ₹200 crore to ₹300 crore. Rising oil prices are also negative for paint stocks, tyre stocks, and other companies, who use crude and crude derivatives as a significant input component. As costs rise, margins will get hit.
2 / 7Tourism Stocks | Stocks linked to tourism, be it the aviation stocks like IndiGo and SpiceJet, hotel stocks like Indian Hotels and peers, or travel proxies and booking firms such as Yatra, Ixigo (Le Travenues Tech), will also be in the spotlight as Dubai, along with the Middle Eastern countries were also hit by Iranian missiles overnight, leading to flight cancellations and airspace closures. Dubai Airport is one of the busiest in the world and a major tourism hub as well. As many as 11.9 million passengers travelled to the Dubai International Airport, making India the largest source market, according to DXB data. Shares of both Ixigo and Yatra Online were down up to 20% in February.
3 / 7Gold Financiers | The rise in the geopolitical conflict across the Middle East will prompt a flight to safety when the markets open on Monday. Gold and Silver prices, which are already trading near record levels, could see panic buying if the market does end up having a gap-down. A rise in Gold prices will put the spotlight back on gold financiers, Manappuram and Muthoot Finance, both of which have been in the news in February for reasons of their own. While Manappuram shares were flat in February, Muthoot fell around 12%. The rise in gold prices will also put the focus on jewellery linked names, such as Titan, Senco and Kalyan Jewellers, the latter more so, due to its significant presence in the Middle East as well.
4 / 7Metal Stocks | In case the markets make a move towards haven assets, the US Dollar could also see some strengthening. Although, that has not been the case in recent times, a stronger US Dollar is generally negative for metals. The Nifty Metal Index was the third-best performing sectoral index in February, with gains of 8%. Stocks like Lloyds Metal, Tata Steel, Jindal Steel, Welspun Corp, SAIL, Adani Enterprises, and Vedanta gained between 10% to 15% last month.
5 / 7Tata Motors CV, Mahindra & Mahindra | According to a Bloomberg report, Indonesia is halting an order for 1,05,000 trucks from Tata Motors CV and Mahindra & Mahindra, following a pushback from policymakers. The import of these vehicles was a mix of 4X4x and six-wheeler trucks slated for use to establish more than 80,000 community co-operatives across the country. M&M had announced in February that the deal was its biggest export order ever, that of 35,000 Scorpio pik ups. Tata Motors also said that the order for 35,000 Yodha pick-ups and 35,000 Ultra T.7 trucks was the largest ever into Indonesia.
6 / 7Stocks With Exposure To The Middle East | More than India’s exports to Iran, the bigger ramification will be on stocks that have a significant exposure to the Middle East, after the Iranian drones have hit multiple locations in the region. Shares of Larsen & Toubro, which has a significant exposure to the middle east, as does Kalyan Jewellers, Welspun Corp, along with KEC International, who has also won orders in the region, will all be in the spotlight on Monday.
7 / 7Some of the other stocks to watch, which may not have a great impact due to the larger scheme of things, but did make announcements, include Brigade Enterprises, for the launch of its new project with a ₹1,700 crore gross development value, GAIL, for approving the investment of nearly ₹1,800 crore to set up a greenfield wind power project in Maharashtra, Aurobindo Pharma, where its subsidiary Eugia’s formulations unit in Telangana was inspected by the USFDA with the issuance of four observations, and Vedanta, who emerged as the preferred bidder for the Karnapodikonda bauxite block in Odisha.