The escalating Israel-Iran conflict is negatively impacting Indian oil stocks due to rising crude prices and a weakening Rupee. Stock market analysts advise long-term investors to consider buying five specific oil stocks during this dip, anticipating a recovery as tensions ease.

Amid the escalating conflict between Israel and Iran, Indian oil stocks have experienced significant selling pressure, particularly during the weekend trading sessions. The rise in crude oil prices has further exacerbated this trend, alongside the depreciation of the Indian National Rupee (INR), which reduces Indian oil companies’ capacity to engage in global purchasing power. Consequently, stock market analysts predict continued declines in oil stocks listed on Dalal Street. However, they also recommend that medium- to long-term investors consider buying these stocks amidst current market corrections, as the situation could present recovery opportunities once tensions in the Middle East ease. VLA Ambala, a SEBI-registered Research Analyst and co-founder of Stock Market Today, elaborated on the impact of these geopolitical tensions on Indian oil stocks, stating, “The energy sector’s momentum has weakened significantly and is expected to correct further after a notable decline over the past week. On the other hand, crude oil prices surged… This volatility is triggered by escalating tensions… Further escalation could inflate prices, impacting India’s fiscal deficit…” He recommended five specific stocks for purchase: Gandhar Oil Refinery, Oil India Ltd, Petronet LNG, Bharat Petroleum Corporation Limited (BPCL), and Oil and Natural Gas Corporation Limited (ONGC). 1. Gandhar Oil Refinery: VLA Ambala notes that Gandhar Oil Refinery could see a breakout. Currently trading at ₹216 with a P/E ratio of 16.04, lower than the sectoral average of 18.32, investors should consider buying in the range of ₹210 to ₹215, targeting prices of ₹228, ₹235, and ₹250 while maintaining a stop-loss of ₹200. 2. Oil India Limited: Sugandha Sachdeva, founder of SS WealthStreet, remarked on the impressive performance of Oil India, which has gained approximately 135% year-to-date. She suggested that investors may accumulate shares at the support level of ₹510, with potential targets of ₹665 to ₹680 thanks to renewed upward momentum driven by geopolitical tensions. 3. Petronet LNG: According to VLA Ambala, Petronet’s stock momentum is appealing, recommending a buying range of ₹340 to ₹350 for a target between ₹370 and ₹430. However, the stock’s P/E ratio of 13.11 is marginally above the sectoral P/E of 12.38, and investors should set a stop-loss at ₹310. 4. BPCL: VLA Ambala cautioned that BPCL’s share price, currently around ₹340, indicates potential room for correction. He advises entering between ₹310 and ₹290 for a target of ₹365 to ₹450, with a stop-loss in place at ₹265 over a holding period of 2–8 months. 5. ONGC: VLA Ambala sees ONGC as promising for midterm investors, especially after a predicted correction of 10-15%. With a P/E of 8.33 compared to the sector average of 17.11, investors may find it attractive. He suggested a buying range of ₹276 to ₹255, targeting ₹310 to ₹370, with a stop-loss of ₹240. Investors are advised to conduct thorough due diligence and consult with certified financial experts prior to making investment decisions given the volatile market conditions.

The article discusses the implications of the ongoing Israel-Iran conflict on the Indian oil market, highlighting its effects on oil stock prices amidst rising crude oil prices and the depreciating value of the Indian Rupee. This context is essential in understanding the market dynamics and investment recommendations provided by analysts. The statement from VLA Ambala underscores the broader economic impact of geopolitical tensions, while individual stock evaluations reveal potential investment opportunities for cautious investors looking for medium- to long-term gains amid market fluctuations.

In conclusion, the ongoing Israel-Iran conflict has introduced volatility in the oil market, leading to declining oil stocks in India. However, analysts see potential recovery opportunities for medium- to long-term investors. The five recommended stocks—Gandhar Oil Refinery, Oil India Ltd, Petronet LNG, BPCL, and ONGC—offer various entry points and target prices, suggesting that strategic investments could yield favorable results as market conditions stabilize.

Original Source: www.livemint.com

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