LIVE MARKETS-Energy intensive sectors, beware – or not?
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ENERGY INTENSIVE SECTORS, BEWARE - OR NOT?
The Iran war has sent energy prices skyrocketing – and that could be future-changing for some sectors, according to Christian Stocker, lead equity strategist at UniCredit.
Energy-exposed industries “are experiencing immediate margin pressure as fuel and input costs surge,” he said in a note on Thursday.
“Supply‑chain uncertainty is likely to persist, leading to a rerouting of transport routes and rising insurance premiums, which will likely further weigh on operational efficiency,” Stocker added.
Airlines and travel, transport and logistics, chemicals and basic materials producers, and manufacturers of goods like steel, cement, paper and glass could all suffer – and eventually pass on the pain further, he explained.
But, as ever, it all depends.
While sharp or prolonged escalation would add pressure for energy-intensive sectors, they may just get away with it if tensions ease soon and energy prices cool.
“In a moderate scenario, we see solid medium‑term recovery potential for sectors such as industrials, materials, consumer discretionary and financials, which are currently trading at reduced price levels,” Stocker said.
(Sophie Kiderlin)
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