Need to factor in higher oil prices fiscal stress: IndAsia Fund Advisors
While D-Street has looked to surpass negative cues emanating from higher crude oil prices, experts believe that these need to be factored in.
Oil prices on Thursday remained close to Wednesday’s high of $ 73.93 per barrel, which was last seen in 2014, buoyed by declining US crude inventories and as top exporter Saudi Arabia is expected to keep withholding supply to prop up the market. Brent crude is inching towards $ 74 a barrel and WTI crude is seen rising towards $ 69 a barrel.
Pradip Shah of IndAsia Fund Advisors told CNBC-TV18 that investors need to negotiate for higher oil prices as well as fiscal stress. “We have oil, Trump as well as election factors to watch out for. Both oil as well as rupee’s moves add to the inflation for us and that does not augur well for the economy,” he said.
Shah said it is good that the economy is performing well and attempting to stand on its feet. “Air passenger traffic growth at 28 percent is fabulous.”
He believes the biggest factor in play across themes could be noise around elections or change in sentiment. While consumption has witnessed good progress, demand has risen, but election-related noise could hamper these moves, he added.