The impact of increasing tension in the Middle East is no longer limited to just the border, rather its shock can reach the pockets of common people. In recent incidents, the conflict between Iran and Israel has intensified. Meanwhile, America’s actions and Iran’s retaliatory attacks have created turmoil in the crude oil market. This is directly affecting those companies whose work depends on oil based raw materials.
Many chemicals used in making paint are made from petroleum. When crude oil is expensive, companies’ costs increase. In the current situation, the price of Brent crude jumped by more than 6% to around $ 77 per barrel. About 20% of the world’s oil supply passes through the Strait of Hormuz. The news of increasing attacks here and danger on ships has created fear of supply stoppage.
Shock to paint companies in stock market
Due to the fear of oil becoming expensive, investors have started staying away from the shares of paint companies. On Monday, shares of Asian Paints fell more than 3% to around Rs 2,298, which is the lowest level in several months. Indigo Paints saw a decline of about 6%, while shares of Berger Paints also slipped by more than 5% to reach the year’s low. It is clear that the market is afraid of pressure on profits in the coming time.
What will be the impact on common people?
If oil prices remain high for a long time, companies may pass on some of the increased costs to customers. This means that the cost of painting or renovating the house may increase. At present there is no official confirmation of complete closure of the Strait of Hormuz, but the uncertainty itself is enough to spread panic in the market.
Amidst this turmoil, the Indian stock market also opened under pressure. There was a sharp decline in Sensex and Nifty 50, due to which a huge amount of investors’ money was wiped out in the early trading itself. Analysts believe that until oil prices stabilize, sectors like paint, tyres, aviation and chemicals may remain under pressure.
Also read- Pakistan becomes bankrupt in Iran-Israel war! There was such a devastation in the stock market that work had to be stopped.