Amid recessionary concerns, analysts recommend investors start buying into such stocks on a medium to long-term basis as the correction in crude price will ease the cost of manufacturing, improve the volume demand and subsequently increase their gross margins.
Oil prices slid about 2% to a 12-week low in volatile trade on Wednesday, extending Tuesday's heavy losses. Brent futures for September delivery fell $2.20, or 2.1%, to $100.57 a barrel. US West Texas Intermediate (WTI) crude fell $1.54, or 1.6%, to $97.96
"The decline in crude oil prices not only helps in decreasing current account deficit, lower transportation cost, a decline in inflation but also helps in lowering the cost of production of companies in certain sectors which are hugely dependent on crude oil prices," said Rajesh Sinha, analyst, Bonanza Portfolio.
"With lower raw material prices, the company has the flexibility to pass on the benefit to the end customer to gain market share."
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