Friends,
India’s share in worldoil consumption was only a3.1% in 2006 . It is growing at 4.3% per annum while in case of China it is growing by 7.5% per annum.
The oil is selling atover $140/bbl and has been seen to be affecting the Indian markets . You may very well understand that the Indian economy would not be called overly vulnerable to oil price rise and at least not as much as the economies of USA and China as also other developed nations of Europe. If this is the scene like, the markets in China and USA and also in Europe are all the more less welcome for investment presently. Any fund manager would like to invest funds in more secure markets and therfore to my mind the flow of money towards India should beround the corner.
The requirement of oil as an energy source is just 25% of overall energy requirement in case of India. China is better place on this count and has just about 20% requirement met out of oil. The other peer under ‘BRIC’ has much worse situation ie it consumes oil to meet 50% need. Russia is a different case altogether for it is surplusin oil and has no worries on this score.
The only weakness India may be supposed to be having on oil front is that it now imports 72% of the oil requirement. With India companies sharing the exploration projects around the world , we may have some respite if only govt. withdraws its hand from the oil matters and leaves the pricing and procurement in the hands of companies concerned.
Nifty today touched new lows over the last 52 weeks but has somehow managed to retain level above 4000.
With th first quarter results about to be announed in the first fortnight of July 08, there is some sort of rush at spoiling thesentiment. There is method in madness for sure. The political scene is discounted much earlier and even if the govt. fall on the ‘nuke’ issue , it should not make much difference.
HariO,
krsnaKhandelwal
