With crude oil on the rise, where should investors look next? Explains expert

The recent rise in global crude oil prices has once again raised concerns among investors, with experts warning that continued volatility could weigh on market sentiment and impact sectors that depend heavily on oil.

Speaking on the issue, Gaurang Shah, Senior Vice President at Geojit Investments, said crude oil has climbed sharply in just a few trading sessions, moving from around $85 a barrel to much higher levels. He said the latest attack on a Saudi oil vessel in the Red Sea has added to supply concerns, while ongoing tensions between the US and Iran have further increased uncertainty.

Shah noted that crude oil prices have been highly unpredictable in the past as well. He pointed out that prices had earlier surged above $120 a barrel before falling sharply after geopolitical tensions eased.

Given the current uncertainty, he advised investors to avoid oil exploration companies, oil marketing firms and businesses where crude oil is a major raw material cost.

Instead, Shah sees opportunities in sectors such as automobiles, power, pharmaceuticals and healthcare. He believes India's free trade agreements could support the auto sector, while healthcare remains relatively insulated from global shocks due to steady demand.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)