High oil prices not always bad for mkts

Oil prices, economy & market performance

- PUNEET WADHWA

High oil prices do not always dampen market sentiment in India, shows data. From a low of $62.78 on May 30, Brent crude oil prices have surged 23 percent to a high of nearly $77 per barrel (bbl) amid geopolitical tensions. Despite this, the BSE Sensex, amid volatility, has managed a gain of 0.6 percent during this period, according to data.

In the financial year 2012-13 (FY13) and FY14, with oil prices averaging $110/bbl and $108/bbl respectively, the Nifty 50 managed to post a gain of 7.3 percent and 18 percent. India's economy grew at a healthy clip of 5.5 percent in FY13 and at 6.4 percent in FY14. Triple-digit crude oil prices were common from 2007 to 2014, said G Chokkalingam, founder and head of research at Equinomics Research.

Things changed from 2014 as the US increased production and shale gas came into play.