Oil on the boil poses risk to Indian equities, says JPMorgan

Even as Indian equities have shown resilience to crude oil’s more than 10 per cent rally in the last two weeks, any continuation of the surge poses a greater risk to the stocks compared with other assets, JPMorgan said in a note.

Higher crude oil prices accentuate India’s twin deficit problems, fiscal and current accounts, along with rising inflation, it said. Since 2014, India has underperformed emerging market (EM) peers during periods of sharp rallies in crude oil prices, the brokerage said.

IT and defensive stocks outpace broader market when oil prices rise, it added. Brent crude prices