Newspaper Summary 150326

 

Iran war blows up food prices in Gulf as logistics disarray leads to shortages, soaring freight rates

V Sajeev Kumar, Subramani Ra Mancombu (Kochi/Chennai)

The Iran war is leading to food inflation in the Gulf region, primarily the United Arab Emirates, with sea and air routes affected since February 27. Multiple sources told businessline that prices of vegetables and fruits have doubled, while stocks of foodgrains, mainly rice, are thinning.

“Last week, vegetable trays in some shops in Sharjah were empty. This week, prices have come down a tad,” said a Sharjah-based person from Kerala. “Prices are sky high. Tomato is 15-18 dirhams now,” said a Dubai-based person from Tamil Nadu.

MANAGING SUPPLIES

A trading source said the UAE has only a fortnight’s stock of premium rice varieties, while ordinary varieties may last 45 days. The Gulf country could soon run out of potatoes. This being the Ramadan festival season, there is high demand for several products from India in the wake of the crisis.

“Traders are currently managing supplies through shipments from Sri Lanka, Vietnam and Thailand. However, rising freight costs have forced many buyers to defer purchases,” said Siraj.

FREIGHT RATE TRIPLES

Munshid Ali, General Secretary of the Kerala Exporters Forum, said his firm had received shipment orders for 2,000 kg of pineapple and 27 tonnes of coconut from Tamil Nadu to meet the festival demand. However, soaring freight charges have made shipment unviable.

The air freight cost for pineapple from Kerala airports soared from ₹70–80 a kg to around ₹210, prompting buyers to cancel orders. “For coconuts, container freight has climbed to around $3,800,” Ali said.

DISRUPTED LOGISTICS

Asked how traders are navigating shipping routes amid the conflict, Ali said some cargo is being routed through alternative paths. “Saudi Arabia and Oman have other routes to cater to the Gulf Cooperative Council through road because Red Sea and Oman ports do not need to use the Strait of Hormuz,” Ali said.

The UAE is taking Oman’s help due to its proximity and things are being managed through road. Ali noted that over 150 tonnes of perishable exports from Kerala are stranded, as both air and sea cargo routes have been severely affected. Although some urgent supplies are being flown in...

How gold has stocks for breakfast

Kumar Shankar Roy bl. research bureau

BULLION LESSON. In 10 years, only 26% of stocks have beaten gold; over one year, just 3% did as the shiny metal crushed equities.

If Indian equities are supposed to reward patience, gold, often lampooned as a 'dead' asset, has spent the last decade mocking that promise. In the one year to March 13, 2026, gold (MCX spot prices) returned 82.86 per cent. Out of roughly 1,134 NSE-listed stocks with sufficient trading history, only 37 or 3 per cent beat it. That means 97 per cent did not.

But the real insult lies in the longer periods where equity investors usually demand respect for their endurance. Over three years, gold returned 178.42 per cent and only 13 per cent of stocks beat it. Over five years, it returned 257.68 per cent and just 21 per cent beat it. Over seven years, only 18 per cent got past gold’s 390.34 per cent return. Even over ten years, after all the sermons on compounding and discipline, only 26 per cent of stocks managed to outperform gold’s 443.37 per cent gain.

Dalal Street may have built an equity culture after Covid, but the precious metal has built a case file of crushing performance. This is what makes the old line about the Indian housewife being the world’s best fund manager so irritatingly durable.

HOUSEHOLD TRADE

While the formal investor learnt to say SIP, small-cap, tactical allocation and buy-on-dips, she kept buying gold. No earnings calls, no management guidance, and no quarterly disappointment. Just a dull-looking metal quietly doing the one thing equity markets claim to do: preserve purchasing power and occasionally embarrass consensus.

This is not merely one freak year of missiles and safe-haven panic. The yearly cuts show that gold has repeatedly been a difficult hurdle for stocks even when its own annual return was not spectacular.

• 2025: Gold returned 32.57%; 82% of stocks failed to beat it.
• 2023: Gold returned only 8.59%; 63% of stocks still could not get past it.
• 2020: Gold rose 29.9%; a crushing 96% of stocks lagged it.
• 2019: Gold’s return was just 6.57%; 84% of stocks still failed to beat it.

Gold did not need to be brilliant every year; the stock universe merely needed to be ordinary, volatile, or badly distributed. Equity bulls can point to friendlier windows, such as the 2021 cut when 94 per cent of stocks beat gold's 5.54 per cent return, or 2024 when 75 per cent did. But gold waits for the more disorderly years and keeps winning enough of them.

VALUATIONS MATTER

Data shows that when starting Nifty 50 valuations are not especially cheap, gold has often done well relative to the index.

• When the Nifty 50 P/E starts in the 20-25 band, gold beats the Nifty 50 by an average 11.27 percentage points over three years.
• In the 15-20 band, it beats by 6.44 points.
• Even in the 10-15 band, it still edges ahead over three years.

Gold’s own average three-year returns across these starting valuation bands are strong: 61.52 per cent from the 10-15 band, 46.31 per cent from 15-20 band, and 48.05 per cent from 20-25 band.

The joke is on modern portfolio snobbery. The asset long treated as backward and unproductive has spent years exposing how few stocks actually deliver the heroic long-term story investors are sold. Gold may not produce cash flows, but it has produced discomfort for anyone who thought equities would easily leave it behind.

None of this means investors should dump equities and marry bullion. It simply means gold has historically looked most useful when fear is rising, liquidity is uncertain, and equities are not entering from obviously cheap valuations. When the market is expensive and the world is noisy, gold deserves more respect than the average stock bull likes to give it.

Wrecking ball of war hits bourses

INDEX OUTLOOK: The break of crucial support last week opens the door for more downside

Gurumurthy K

The Indian benchmark indices were knocked down badly last week. Nifty 50 and Sensex tumbled over 5 per cent each, while the Nifty Bank index was down about 7 per cent. We had expected the benchmark indices to bounce back from their key supports, but that view has gone wrong. We now prefer to stay out of the market and watch, as charts indicate there is more room to fall from here. Among the sectors, the BSE Auto index tumbled about 10 per cent.

FPIs SELL

The Foreign Portfolio Investors (FPIs) sold heavily for the second consecutive week, with the equity segment seeing a net outflow of about $3.44 billion last week. The FPIs have sold about $5.7 billion in just two weeks of this month, which can keep the indices under pressure for some more time.

NIFTY 50 (23,151.10)

• Short-term view: The outlook is bearish. Resistances are at 23,700 and 23,900. Nifty can fall to the 22,800-22,600 support zone; failure to bounce there can drag it further to 22,200-22,100. Nifty needs a strong rise above 24,000 to bring back bullishness.
• Medium-term View: The rally to 28,000 will not happen immediately. The region between 22,200 and 22,000 is the crucial support to watch next. A bounce from there can take Nifty back to 26,000-26,400, keeping the broader sideways range intact. Nifty will come under a big threat if it breaks below 22,000.

NIFTY BANK (53,757.85)

• Short-term view: Immediate support is in the 53,500-53,300 region. A corrective bounce can take the index to 55,500-56,000, but a fresh fall could drag it down to 52,200. A sustained rise above 56,000 is needed to ease downside pressure.
• Medium-term view: We allow for an extended fall to 52,200. A strong bounce from there could eventually take the index back to 60,000 levels. We retain a medium-term target of 64,000-65,000, which would only go wrong if the index declines below 52,000.

SENSEX (74,563.92)

• Short-term view: The outlook is negative, with room to see 73,000-72,800. It must rise past 77,500 decisively to see relief.
• Medium-term view: The fall below 75,500 has set aside the chances of seeing 90,000 for now. Strong supports remain at 72,700 and 72,250. A bounce and subsequent rise above 77,500 could return the Sensex to 85,000-86,000.

NIFTY MIDCAP 150 (20,233)

The fall below 20,800 has increased pressure, but crucial support is around 20,000. A bounce there and a rise above 21,100 will keep the broader bullish view alive. The danger is if the index breaks below 20,000, potentially seeing 18,500-18,300.

NIFTY SMALLCAP 250 (14,857.50)

The break below 15,000 has opened doors for an extended fall to 14,000, which is a strong support that can halt the fall. As long as the index stays above 14,000, the long-term rally to 22,500-23,000 cannot be ruled out.

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LEVELS TO WATCH

• Nifty 50: 22,600, 22,100
• Sensex: 72,700, 72,250
• Nifty Bank: 53,300, 52,200

Claiming refund for e-banking fraud

Kumar Shankar Roy bl. research bureau

As digital payments evolve and fraud risks change, the RBI wants customer protection rules to keep pace. On March 6, the RBI issued draft directions reviewing its 2017 framework on limiting customer liability in unauthorised electronic banking transactions. Here is a lowdown:

What is the extent to which customers can be compensated for small-value fraudulent electronic banking transactions?

Under the draft framework, a bona fide individual victim can get compensation for fraudulent electronic banking transactions involving a gross loss of up to ₹50,000. The compensation is capped at 85 per cent of the net loss, or ₹25,000, whichever is lower. Net loss means the loss after reducing any recovery already made, whether before or after compensation is paid. This compensation can be claimed only once in a lifetime. In a joint account, only one account holder can claim it, and that person cannot later claim it again in an individual capacity.

But this is not an automatic payout in every fraud case. The bank must first be satisfied that the claim is bona fide under its internal policy. The customer must also report the transaction on the National Cyber Crime Reporting Portal or Helpline 1930, and to the bank, within five calendar days of the transaction.

Which are the electronic banking transactions covered by the rules?

The draft directions widen the scope of the framework beyond unauthorised transactions. They now cover “fraudulent electronic banking transactions”, which include both certain authorised transactions tainted by fraud and unauthorised transactions. In other words, the rules are no longer confined only to unauthorised electronic banking transactions.

An authorised electronic banking transaction includes one done by the customer, or by a previously authorised third party, using a standing instruction, mandate, OTP, password, card details or another bank-provided electronic authentication method. But the draft also says some fraud-hit authorised transactions will still fall within the protection framework. These include cases where:

• A third party uses credentials obtained from the customer through fraud.
• The customer approves a transaction under coercion or duress.
• The customer is tricked into sending money to a scammer posing as a legitimate recipient.

The draft also links “electronic banking transaction” to the Payment and Settlement Systems Act definition of electronic funds transfer, and specifically includes both card-not-present and card-present transactions. It also envisages reporting and review across categories such as Internet banking, mobile banking and ATM transactions.

What facilities should banks provide for reporting of fraudulent electronic banking transactions?

Banks must provide customers with 24x7 access through multiple reporting channels. These can include phone banking, SMS, email, IVR, a dedicated toll-free helpline and reporting through the home branch. These facilities are meant both for reporting fraudulent transactions and for reporting loss or theft of a payment instrument such as a card.

The bank must also build an alert system. The transaction alert SMS must carry a number to which the customer can immediately send an objection SMS. The bank must also place a direct reporting link on its website home page. The draft also requires a clear audit trail, recording the date and time when alerts were delivered and when the customer’s response was received.

When is a customer entitled to zero liability and reversal of transaction? What are the timelines prescribed?

The draft gives a customer zero liability in two broad situations:

1. If the fraudulent electronic banking transaction happened because of negligence or deficiency on part of the bank, the customer gets zero liability and reversal, regardless of whether it was reported by the customer.
2. In cases of third-party breach, the customer gets zero liability and reversal if the unauthorised fraudulent electronic banking transaction is reported to the bank within five calendar days of the transaction.

Where reversal is required, the bank must reverse the transaction with value dating from the original transaction date, meaning the customer should not lose interest or bear extra charges because of the delay. The bank must examine the complaint and issue its response within 30 calendar days from receipt of the complaint. Also, once the customer has reported the fraudulent transaction, any further unauthorised transaction after that point must be borne by the bank.

What is third-party breach under these rules?

The draft defines third-party breach as a situation where the deficiency lies neither with the bank nor with the customer, but elsewhere in the system. The directions specify that this includes intermediaries such as a third-party application provider, payment aggregator, payment gateway and telecom service provider. If the failure arose at one of these layers, the case may fall within the third-party breach category.

How is the compensation shared between the RBI, customer’s bank and beneficiary bank?

The draft lays down a fixed sharing formula for the proposed small-value compensation mechanism:

• For losses below ₹29,412: Compensation is 85 per cent of net loss. Of the gross loss, 65 per cent is borne by the RBI, 10 per cent by the customer’s bank and 10 per cent by the beneficiary bank.
• For losses between ₹29,412 and ₹50,000: The compensation is capped at ₹25,000. The contribution is fixed at ₹19,118 from the RBI, ₹2,941 from the customer’s bank and ₹2,941 from the beneficiary bank.

The bank must pay the customer within five calendar days of receiving the compensation application and then seek reimbursement from the RBI on a quarterly basis. This arrangement is proposed only for one year initially.

How does lost amount recovery affect compensation?

Compensation is based on net loss, not just the amount first reported as lost. If some money is recovered before compensation is paid, the customer’s loss comes down and compensation is calculated on that reduced amount. If money is recovered after compensation has already been paid, the customer’s bank must recalculate compensation based on the revised net loss and apportion the recovered amount accordingly.

Weak equities, strong dollar

GAINING STRENGTH: The dollar index can rise to 103-104 on a break above the immediate resistance level of 101

Gurumurthy K

The Dow Jones Industrial Average, S&P 500 and the NASDAQ Composite index fell for the third consecutive week. The Dow Jones, down 1.99 per cent, fell the most, while the S&P 500 and the NASDAQ Composite index were down 1.6 per cent and 1.26 per cent respectively.

The dollar index and the Treasury Yields, on the other hand, have risen sharply over the last couple of weeks. High risk aversion on the back of the ongoing US-Iran war is aiding the greenback to climb higher. Broadly, the equities look weak while the dollar index can gain more sheen in the near term.

DOW JONES (46,558.47)

The outlook is bearish. Immediate resistance is around 47,300, and above that, 48,000-48,300 is the next strong resistance zone. Immediate support is at 46,450, and any bounce from here can be capped at 47,300 itself. The Dow can break 46,450 and fall to 45,000 in the coming weeks.

S&P 500 (6,632.19)

The index is under selling pressure. Immediate support is at 6,600, where a corrective bounce could take it higher to 6,750 but likely no further. The index is likely to break the 6,600 support eventually, potentially dragging it down to 6,400 in the coming weeks. While chances are high for a bounce from 6,400, it remains to be seen if that would be a trend reversal or just a corrective rally.

NASDAQ COMPOSITE (22,105.36)

The index has been facing strong resistance in the 22,800-23,000 region over the last few weeks. The price action indicates a gradual fall, with an important support around 21,400 likely to be tested soon. A break below that level can then drag the index down to 20,500 and even lower.

DOLLAR OUTLOOK

The dollar index (100.49) has risen well and closed above the psychological 100 mark. Price action over the last two weeks indicates that the upmove is gaining momentum. Supports are at 99.80 and 99.20.

A crucial resistance is around 101, which can be tested this week. Failure to breach 101 can trigger a corrective fall to 99.80, but looking at recent price action, chances are high for the index to breach 101 eventually. That would clear the way for a rise to 103-104. The index would have to fall below 99 and sustain below 101 to turn the outlook negative.

TREASURY YIELD

The US 10Yr Treasury Yield (4.28 per cent) has risen sharply, breaking above the key level of 4.2 per cent. Cluster of supports are in the 4.23-4.18 per cent region, while resistance is around 4.3 per cent. Failure to breach this hurdle can keep the yield in the range of 4.18-4.3 per cent.

FPIs sell ₹39,451 crore in Indian markets last week

RELENTLESS SELLING: Equities bore the brunt as ₹23,457.02 crore was sold in five sessions

Anupama Ghosh, Mumbai

Foreign portfolio investors (FPIs) remained net sellers in Indian markets for the fifth consecutive session on Friday, pulling out a net ₹7,491.51 crore that day, according to daily trends data released by NSDL. Over five trading sessions up to Friday, FPIs had pulled out a whopping ₹39,450.60 crore from Indian markets.

Equity bore the brunt of the selling, with net outflows of ₹7,375.05 crore on March 13. The stock exchange segment alone saw net equity sales of ₹7,311.10 crore, while the primary market and other segments recorded a net outflow of ₹63.95 crore. Gross equity purchases stood at ₹16,081.97 crore against gross sales of ₹23,457.02 crore.

MIXED IN DEBT

Debt instruments offered a mixed picture. The ‘Debt - General Limit’ turned positive, recording a net inflow of ₹503.92 crore, driven largely by primary market activity of ₹765.42 crore in purchases. ‘Debt - VRR’ also posted a marginal net inflow of ₹87.89 crore. However, ‘Debt - FAR’ remained under pressure with net outflows of ₹511.52 crore.

Mutual fund schemes together saw a net outflow of ₹197.72 crore, with debt schemes accounting for ₹153.36 crore of that total.

WEEKLY PEAK

The week’s selling was relentless. Daily net outflows ranged from ₹7,491.51 crore on March 13 to ₹8,405.83 crore on March 12, the heaviest single-day outflow of the week. March 11 saw outflows of ₹7,983.88 crore, followed by ₹7,960.37 crore on March 10 and ₹7,609.01 crore on March 9.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, noted that “The FPI selling continued unabated in March. FPIs were net sellers on all trading days in March. The total FPI selling through exchanges till March 13 stood at ₹54,455 crore.”

Shrikant Chouhan, Head of Equity Research at Kotak Securities, said FIIs were “net cash sellers to the tune of ₹46,166.58 crore as of March 2026 (till date).” He described global equity markets as “remaining... under stress amid continued conflict in West Asia and the absence of off-ramps,” and stated that FPI “flows are expected to remain volatile.”

On the derivatives front, FPI open interest in index futures rose to 2,87,383 contracts (₹44,829.76 crore) on March 13, up from 2,69,670 contracts on March 12. Stock futures open interest stood at 68,45,218 contracts worth ₹4,23,622.66 crore. Index options open interest was at 29,03,070 contracts valued at ₹4,50,916.22 crore.

Stocks in the line of fire

DEJA VU: With war raging in West Asia, oil PSUs in India are under the spotlight. Are they value bets or value traps? Given the similarity, we draw parallels with the Russia-Ukraine war to decode the puzzle.

Nishanth Gopalakrishnan bl. research bureau

Is there enough LPG for India’s needs, is the burning question on everyone’s mind right now. The ongoing hostilities between US-Israel and Iran have squarely turned the spotlight on India’s oil infrastructure and the companies that own and operate it.

India imports over 90 per cent of the crude it consumes, and crude-based petroleum products form about 30 per cent of its energy mix. Given this situation, oil infrastructure—including oil fields, pipelines, refineries and marketing networks (fuel stations)—is critical for India’s energy security. Consequently, PSUs play a significant role across the infrastructure and the value chain in this space.

THE VALUE CHAIN

• Upstream: Companies such as ONGC and Oil India (OIL) handle exploration and production activities.
• Downstream: The three oil marketing companies (OMCs)—IOCL, BPCL and HPCL—along with two pure-play refiners, MRPL and CPCL, manage refining operations.
• Midstream: OMCs operate pipelines transporting crude and products, alongside dedicated operators like GAIL, focusing on storage and transportation.

The scale of these PSUs is massive: 170 mt per annum of refining capacity (two-thirds of the nation’s total), 35,000 km in pipelines, 92,000 retail fuel outlets, and ₹19 lakh crore ($210 billion) in revenue.

Despite this scale, their market values remain low at about ₹8 lakh crore, trading at paltry mid-single-digit or high single-digit PEs. Since the US-Iran war began, crude prices have climbed 42 per cent, causing OMC shares to crash between 15 and 20 per cent, making them appear even cheaper.

BRASS TACKS

The primary reason these companies do not fetch healthy valuations is their lack of control over market prices.

• Upstream: They profit when crude prices rise but cannot influence the price itself. Furthermore, the government may impose a windfall tax to limit their earnings during price surges.
• Refineries: Their prospects depend on gross refining margin (GRM)—the gross profit per barrel of crude processed. Earnings track global GRM benchmarks (like Singapore GRM), driven by global demand and crude prices. Government-imposed export duties on products like diesel are another risk factor.
• OMCs: While refineries might profit from higher GRMs, OMCs suffer marketing losses if the government does not allow them to raise retail prices (petrol, diesel, LPG) proportionately—a phenomenon known as under-recovery.

MIRRORING 2022-23

Today’s scenario closely resembles the Russia-Ukraine war of February 2022. Back then, crude prices shot up 17 per cent in just five trading days, eventually hitting a peak of $138 a barrel and sustaining between $100 and $120 for several months.

The current situation is arguably worse. A week into the war, crude gained 28 per cent, rising from $73 to $93. Crucially, while only 10 per cent of global crude trade was interrupted in 2022, this time over 20 per cent of global supply is at stake, as it passes through the Strait of Hormuz.

ENERGY ECONOMICS

Historical cycles show distinct patterns for different players:

• The 2022 Aftermath: In FY23, OMCs faced massive pain due to petrol/diesel price freezes and ₹30,000 crore in LPG under-recoveries. HPCL slipped into losses, while IOCL and BPCL saw EBITDA decline. In contrast, upstream players and standalone refiners gained; from the start of the war to their FY23 peaks, MRPL rose 189 per cent and CPCL 271 per cent.
• Recovery and New Pressures: FY24 saw a recovery for OMCs as crude corrected 14 per cent and retail prices remained unchanged. However, FY25 brought new challenges with falling GRMs and combined LPG under-recoveries ballooning to ₹41,000 crore.
• Recent Relief: In August 2025, the government announced a ₹30,000-crore one-time compensation to OMCs for LPG losses, payable in instalments through FY26 and FY27.

MARKET ACTION & VALUATION

Earnings in this sector are highly volatile, making the P/E ratio a misleading metric, especially for OMCs. For instance, BPCL’s P/E shot up to 35x in FY23 due to poor earnings, even as the stock was bottoming out.

A more reliable metric is the price-to-book value (P/B) ratio. Historically, the best buying opportunities for these stocks have occurred when their P/E was invalid or very high, and their P/B ratio was hitting prior bottoms. Investors looking for value bets in OMCs should consider their attractiveness as they trend closer to these P/B historical floors.

US set to release 86 m barrels from emergency crude oil reserves

Bloomberg

The Trump administration has started the process of a mammoth drawdown of the US emergency oil reserve, issuing a request to exchange 86 million barrels of crude oil. Deliveries from the Strategic Petroleum Reserve, which are part of a massive 172 million barrel release announced Wednesday, are expected to begin moving to markets by the end of next week, according to a Friday statement from the Energy Department.

The release is expected to take four months to complete and is part of a 400 million barrel effort coordinated with other nations. This initiative is aimed at lowering the prices of crude, gasoline, diesel, and jet fuel, which have climbed since the US-Israel invasion of Iran. The war has brought shipping traffic to a virtual standstill in the Strait of Hormuz, a critical passage through which roughly a fifth of the world’s oil flows.

The move has also eased political pressure on President Donald Trump to address rising fuel costs prior to November’s midterm elections. Under the terms of the exchange, companies will return the borrowed oil to the Energy Department with additional barrels as a premium.