Through the week I have the opportunity of speaking to some of brightest and best minds in Indian markets and beyond. This newsletter is a synopsis of some of my observations and learnings from these conversations.
This week has been about moving on. At least from a markets perspective, markets have a knack for moving on before the news cycle does. Mentally, investors have already priced in the idea that the Iran war is over — or at least contained. Risk appetite is slowly returning, and the worst‑case scenarios are no longer front and centre. But that does not mean the after‑effects have vanished.
The single most important indicator to track now is not the latest Truth Social post or viral meme, but a far more practical metric: how many ships successfully make it out of the Strait of Hormuz. Since the double blockade this week from the US and Iran, the number is a measly one or two per day.
For India, crude prices matter far more than the latest Trump post or geopolitical one‑liners. India is more vulnerable than many of the parties directly involved in the conflict simply because of its heavy dependence on energy imports. This is apparent from the fact that while US markets have returned to pre-war levels, the Nifty is still about 7% away in dollar terms from its lows — this after two positive weeks.
What's more worrying is the question of the rally sustaining. Even if the war is truly over and oil starts flowing smoothly tomorrow, the damage has already been done. The impact will likely linger for at least the next two to three quarters. NDTV Profit reported this week that banks have asked the regulator for a moratorium on MSME loans. Even a ceasefire extension cannot wish away the pain that has already been inflicted.
Early smoke signals from the IT sector are not encouraging. Commentary so far points to soft demand and margin pressure, making the banking results expected over the weekend even more critical for market direction. Financials remain the top pick among experts across the board, but an important question remains unanswered: is the full impact of the war being factored in?
India's Vulnerability
Globally, equity markets fell between 7% and 24% during the US‑Israel‑Iran conflict. In dollar terms, the Nifty 50 dropped 15.5%, the third‑worst performer. As calm returns, only two indices — the S&P 500 and China's CSI 300 — have fully recovered losses. The Hang Seng and Nikkei are within 1%. The Nifty, however, is still 6.6% away, just below the Philippines' PSEi. Thus, the war may be over. The recovery trade is not.
View From The Disruptors
For the latest episode of 'The Disruptors', I interviewed brothers Satyajit Hange and Ajinkya Hange who run Two Brothers Organic Farms in their family village near Pune. Sons of farmers, the duo moved away from agriculture, earned MBAs and worked in corporate banking - only to return to farming in 2014.
What they encountered was a broken agricultural system - degraded soil, rising chemical use, and food that looked good but lacked nutrition. This prompted them to embrace natural, regenerative farming and eventually turn into an organic, consumer-facing brand, selling grains, pulses, oils and traditionally made food products.
The founders are unapologetic about pricing, arguing that nutritious, responsibly grown food cannot be cheap. This is reflected in their products which are priced well above market alternatives — a 500 ml bottle of their cow ghee costs over Rs 1,100, when other such brands cost less than half. A 100 gm packet of haldi costs Rs 170, three times more than what the regular haldi costs you. Their honey costs Rs 435 per 350 gm bottle, nearly 2x other such products. They argue that their 'premium' pricing is a conscious attempt to reflect the cost of nutritious food and an attempt to shift consumer mindset about food prices. Maybe it is time to price in the value of 'clean food'.
ALSO READ: Price Of War: How The Iran Conflict Has Unsettled US Economy
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