Egypt remains top of the news and as high food prices have been one of the reasons behind the unrest in North Africa, commodity shortages are in focus and that seems to be fuelling investment into commodities. Plus with the Suez Canal being an important shipping choke‐point and the Middle East generally an oil hub, the markets are rightly nervous that the situation in the region could escalate. However, with the Egyptian army saying they will not fight their own people it does raise the prospects for a relatively peaceful solution –however, whether the unrest flows to other countries is a different matter.
Impact on Indian markets
FII selling can take markets down by 10%-15% more, in our view. We will see any decline in stock prices as a buying opportunity to invest in attractively priced growth stocks.
Most of the negatives have been priced in. Were it not for the Egyptian crisis, the market would have seen some consolidation as the fundamentals continue to be positive.
Trade with Egypt hit; Dabur, Marico suspend operations
India's trade with Egypt stands disrupted and companies such as Dabur and Marico have suspended their operations in the strife-torn African country.
Ten Indian firms, including Wipro, Ranbaxy, IFFCO, Dabur and Marico, have their wholly-owned subsidiaries in different parts of Egypt.
Two major FMCG companies - Dabur and Marico-- said they have shut down their plants in Egypt temporally, while Emami is keeping a close watch on the situation.
Source : Bloomberg
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