Israel–Iran Conflict: Impact on Indian Stocks – Winners & Losers Explained

June 2025 Middle East Escalation: Impact on Global & Indian Markets

The recent escalation in the Middle East has sent ripples across the world economy, especially with Israel’s pre-emptive strike on Iran in June 2025, which has heightened fears of a broader regional war.

🌍 Key Global Impacts

• Geopolitical Tensions: Fears of wider conflict, especially around critical oil chokepoints like the Strait of Hormuz.
• Market Reactions:
  • Crude oil prices surged by 12–13%, nearing $78/barrel.
  • Gold prices hit new highs, crossing ₹1 lakh per 10g, as investors seek safe havens.
  • US dollar and Treasuries gained strength.
  • Shipping costs increased due to rerouted vessels around conflict zones.
• Inflation Risks: Higher energy prices threaten to push global inflation higher.

🇮🇳 Impact on India

• Oil and Currency:
  • Rupee declined (~₹86.14/USD), increasing the cost of imports.
  • Rising oil prices widen India’s current account deficit, fueling inflation.
• Stock Market:
  • Sensex dropped around 1,300 points; Nifty slipped below 24,500.
  • Bond yields climbed, reflecting risk aversion.
• Inflation & Economy: Increased energy costs may slow down disinflation, putting upward pressure on prices.

📉 Sectors Likely to Fall – Margin Pressure & Cost Headwinds

• 🔻 Paints
  Stocks: Asian Paints, Berger Paints, Kansai Nerolac, Indigo Paints, Shalimar Paints
  Impact: Crude is a key raw material. Rising input costs will compress margins.
• 🔻 Tyres
  Stocks: Ceat Tyres, Apollo Tyres, MRF, JK Tyres, Goodyear
  Impact: Crude derivatives like rubber and carbon black make up major input costs. Higher oil = higher production cost.
• 🔻 Airlines
  Stocks: IndiGo, SpiceJet, Air India
  Impact: Aviation turbine fuel (ATF) prices surge with oil, eating into thin airline margins. Route disruptions possible.
• 🔻 OMCs (Oil Marketing Companies)
  Stocks: HPCL, BPCL, IOC
  Impact: These companies face margin erosion as they buy expensive crude and sell at controlled prices.

📈 Sectors Likely to Gain – Tailwinds from Conflict & Oil Spike

• 🟢 Defence
  Stocks: GRSE, Paras Defence, BDL, BEL, HAL, Zen Tech, Astra Microwave
  Impact: Rising geopolitical tension boosts defence budgets. India’s ₹16-lakh-crore defence push plus “Make in India” helps these firms.
• 🟢 Shipping
  Stocks: GE Shipping, Shipping Corporation of India
  Impact: With oil routes disrupted and the Red Sea under threat, shipping costs rise. These companies benefit from higher freight rates.
• 🟢 Oil Producers
  Stocks: ONGC, Oil India
  Impact: As crude prices rise, upstream oil producers see better realizations and earnings.

📊 Summary Table: Sector Outlook Based on June 2025 Crisis

Direction	Sector	Example Stocks	Impact
🔻 Down	Paints	Asian Paints, Berger, Kansai Nerolac, Indigo, Shalimar	Higher input costs due to oil
🔻 Down	Tyres	Ceat, Apollo, MRF, JK Tyres, Goodyear	Crude-linked inputs expensive
🔻 Down	Airlines	IndiGo, SpiceJet, Air India	Fuel costs, route disruptions
🔻 Down	OMCs	HPCL, BPCL, IOC	Margin pressure from costlier crude
🔺 Up	Defence	GRSE, HAL, BEL, BDL, Paras, Zen Tech, Astra	Higher defence spending amid conflict
🔺 Up	Shipping	GE Shipping, SCI	Higher freight rates, route rerouting
🔺 Up	Oil Producers	ONGC, Oil India	Gain from higher crude prices

⚠️ Disclosure: I am not SEBI registered. The information provided here is for educational purposes only.

✍️ by @sk
"From coding to calculating, this SDE's passion spans finance, geopolitics, and article writing. With a sweet tooth for rasmalai and khurchan peda, they find balance through spirituality."