Markets on Edge: Oil Shock, Inflation Fears & Election Uncertainty | Aniruddha Sarkar Explains

Added: 2026-04-30

[00:00:00]Anirudh, good morning and welcome to the show always a pleasure to speak to you.

[00:00:03]This is Hiral on this side.

[00:00:05]You know since morning we've been discussing what's happened with regards to where the FOMC comes in. You have Brent which is already a futures are at what 122 plus. Your rupee has breached the 95 mark and your exit polls giving you a pretty mixed, you know, view. I mean there's no particular direction that you're able to take.

[00:00:26]With all of these factors at play with the way markets have opened, what is your your take?

[00:00:35]So I would say that you know the exit polls definitely this time around if you see except for Assam and Bengal is a big kind of you know the number which everyone is looking out for and if you look at the exit polls I think it's absolutely in the middle. So I think no one wants to take any chance with regard to a long weekend and with regard to the exit polls which kind of gives you a 50-50 chance to both the parties to come. So I would not want to be kind of betting on who comes to power on Monday but having said that I think the bigger concern for the market is oil and I think that is something which market is also wanting to factor in and that will be something which will in fact get reflected in the numbers for different companies who start reporting from the next quarter.

[00:01:22]So first quarter is where the big impact will happen because most of the inventory gains and everything has already been taken care of and the third fourth quarter numbers which are coming they're not so bad but the real impact of you know $120 and $115 oil is going to hurt in this quarter.

[00:01:40]So I think market is more worried about that and not so much worried about who comes to power on Monday.

[00:01:46]I I agree Anirudh. I mean >> [laughter] >> there are bigger fish to fry in in the markets balance. Is there any comfort coming in from what you're seeing in terms of quarter four reportage or is that data now redundant in the light of everything that we're seeing?

[00:02:04]>> [clears throat] >> So Tamanna I would say that if you look at the numbers which are coming you know broadly it's a mixed bag and with some positive upsides also. In fact there are a good number of companies who are surprising on the positive but but unfortunately because of you know the broader pessimism in the market even the good numbers are not kind of you know exciting the investors to jump in because everyone is worried about you know where oil is headed and how inflation because I think inflation is one factor. If you see the FOMC meet yesterday good part of the conversation was on inflation. And I think that's a concern which is bothering everyone around the globe.

[00:02:42]Unfortunately there seems to be no end to you know the I would say the Hormuz issue which has happened and there's nothing in picture that you know when it will end and the way things are it seems it's going to get much longer before we see some decline in the oil prices. So I think inflation is a big concern and it will start showing in the consumption also. Because in fact I was just looking at one data point today morning wherein you know the people now economists have started talking about a degrowth in the consumption overall in the world and that is not a great thing.

[00:03:16]Like if consumption overall starts going down definitely it will take at least four to six months for consumption to pick up after that.

[00:03:25]Anirudh so and good morning to you Alex here. I just the the tendency in this kind of a scenario is to start thinking about where you can find a little bit of safety because when things start looking a little questionable and you don't have an outlook for the first quarter you're assuming that for a lot of companies it will get worse. What are the companies that you anticipate or pockets that you anticipate will be relatively resilient?

[00:03:57]So I would say that you know the pockets which will be resilient are those which are not facing the consumers and which are more kind of you know a broader economic play where it it could be you know the government capex heavy you know where you talk about the power capex, you talk about the large infra projects, you talk about aerospace, you talk about defense.

[00:04:17]So I think these will be pockets which will be immune to you know any kind of inflation which goes up and impacts the consumption. Pockets which will get impacted definitely will be I would say the low ticket consumption will get impacted and to some extent even NBFCs could get impacted because if overall the consumer sentiment goes for a toss definitely the borrowing also goes for a toss and also with all the concerns around IT not doing great I think you know this is again something which will be on the top of everyone's mind. So I think there are any consumer facing companies will have headwinds.

[00:04:54]Where I would be betting on is sectors where it is more of the government capex more of kind of macro capex which is happening. Just to put it again power capex, aerospace, defense.

[00:05:07]These are areas where I don't see a big concern.

[00:05:12]Okay. So what about the impact for for example I'm just wondering Anirudh whether earnings estimates for FY27 are capturing this kind of uncertainty because some people have already cut for the Nifty 50.

[00:05:30]They were expecting initially double digit earnings growth and now they've cut it to 8%.

[00:05:35]While others are still saying that there is a possibility that this will settle.

[00:05:39]So I guess it depends on when you expect this conflict to get over and where you see the average of crude prices in the remainder of FY27. What's yours?

[00:05:50]Yeah so I think you know I would say all the numbers which we are seeing today for estimates for FY7 27 they're not yet priced in the full impact. It's more like you know when we talk to companies you know companies are also kind of very kind of in a same spot as we are and they are like you know we take every month as it comes. So I would say getting a good finger on the exact estimate for FY27 looks very very tough.

[00:06:15]I would say that it's more about trying to do a best estimate for where the numbers can be in this quarter the first quarter as it is happening. So I would say it's not yet fully priced in the impact. Now the good part of this is I should not sound too kind of you know pessimistic. The good part is whenever this issue gets resolved with the Strait of Hormuz the recovery could also be equally fast.

[00:06:39]So that is the brightest side to it that you know since it's a kind of the man-made blockade this can also get revolved can get resolved extremely fast. It all depends on who takes the first step. So I would say as of now it looks tough but yes it can change overnight.

[00:06:57]Thank you so much Anirudh for coming in and speaking with us as we just trying to set up what's happening with the markets.