With the fall of the price of Crude oil, we see a few things emerging, and in this post, we highlight what could be the huge negative for Indian markets.See:
• Why is the Crude Price Falling?
• How it is good for Indian stocks
• But there is a bad too: Inflows
• That Big Problem in High Yield US Bonds
• USDINR fall compounds the problem
• Where the problem will manifest and how to deal with it.
The price of crude has dropped to below $65 (Brent, which is more close to what India purchases). From highs of over $110 just a year or so back, this is a dramatic fall. And then, it is a huge part of our imports – more than $100 billion worth of crude is imported every year, and you can imagine that we will be paying much lesser now. In fact, the price of crude that we import fell to a low of $60.58 on Friday.