Oil Prices to Fall: Sunil Singhania Sees Buying Opportunity Amidst Market Chaos
With crude oil hovering near $110–120 a barrel and tensions in West Asia causing ripples in equity markets, most investors are bracing for the worst. However, Sunil Singhania, founder of Abakkus Asset Management and one of India's most closely watched fund managers, sees a different scenario. His question is not how bad it will get, but whether this chaos presents a buying opportunity.
Singhania drew a striking parallel to the silver market, which saw prices surge from $50 to $120 over three months before collapsing just as quickly. He believes that the roughly $25–30 war premium currently baked into crude oil prices is similarly unsustainable. On the supply side, he points to Venezuela ramping up output, the US permitting Russian oil sales, and India purchasing Iranian oil for the first time in seven years. Any resolution to the conflict, he argues, would bring Iranian supply back online rapidly, and structurally, global oil markets remain in oversupply under normal conditions.
Singhania was careful to distinguish between the direct conflict risk, which he sees as limited for a predominantly domestic economy like India, and the more insidious secondary effects. These secondary effects include supply chain disruptions, raw material shortages, and energy availability issues. These factors are already manifesting in production cuts at some companies and early FY27 earnings downgrades. He flagged yields rising to 7.05–7.1% as a warning sign for interest-rate-sensitive sectors, including banks, infrastructure, and real estate.
On the flip side, Singhania identified IT and pharma as near-term defensive sectors, both benefiting from a 1–2% rupee tailwind. He also flagged renewable energy, particularly solar, as a long-term beneficiary as governments globally accelerate their shift away from fossil fuel dependence. “Outsized returns have always been made when investors have invested in adversities rather than good times,” Singhania noted.
Addressing concerns about foreign portfolio outflows, Singhania highlighted a less-reported trend: while FPI selling in listed equities grabs headlines, billions of dollars in strategic investments have quietly entered India over the past six to eight months through banking, NBFC, and private equity deals. Transactions involving RBL Bank, Shriram Finance, Federal Bank, and others demonstrate this trend. With India's weighting in global emerging market portfolios at a 10-year low, he argued that the reallocation trade back into Indian equities remains firmly intact.
His bottom line for investors sitting on red portfolios is straightforward: 25–30 years of experience has taught him that the market recovers fastest for those who stay connected to resilient businesses. The discomfort of today, he believes, is often the setup for tomorrow's returns.
