India (Commonwealth) _ As tensions rose following an attack on Israel by the Palestinian militant group Hamas, shares in Gautam Adani’s Adani Ports dropped more than 5%. International financial markets have been rocked by the Israel-Hamas conflict.
The Haifa Port in northern Israel is under the management of Adani Ports and Special Economic Zones (APSEZ). The port was purchased by the corporation earlier this year for a total of $1.18 billion. On the National Stock Exchange (NSE), APSEZ shares closed 42.25 points or 5.09 percent lower at Rs 788.50. It was one of the Nifty 50’s biggest losses.
Hamas launched its biggest massive military assault against Israel on October 7. Israel retaliated by launching a number of Israel retaliated by starting a string of airstrikes on Gaza that continued through Sunday, October 8. Investors may be concerned about the impact on the Asian stock market even though the conflict isn’t giving any signs of easing up.
On Monday, Adani Ports and Special Economic Zone released a statement after its shares fell more than 5% as a result of investors’ worries over Hafia Port operations in light of the continuing Israel-Hamas war. “We are still thinking about the Israeli people right now. Although Haifa Port is in the North of Israel, Adani Ports noted, “We are closely monitoring the on-the-ground activity in South Israel.”
It should be mentioned that Adani manages the Haifa Port in northern Israel in partnership with a local business; the deal, which cost a total of 4 billion shekels ($1.03 billion), was finalized in January.
All of our employees are safe since we took the necessary precautions. We are constantly on high alert and have a business continuity plan in place that will allow us to react quickly to any situation, Adani Ports said in a statement. The group also emphasized that Hafia’s overall contribution to Adani Ports’ statistics is only 3% of the total volume of cargo, which is comparatively low.
In early Asian trade, the price of crude oil increased by more than 5%. According to a PTI report, transportation charges and insurance premiums for Indian exporters of goods to Israel may be higher.
The battle may result in greater insurance and transportation expenses for India’s exports of goods. According to the Global Trade Research Initiative (GTRI), India’s ECGC may levy greater risk premiums from Indian businesses exporting to Israel.
Ajay Srivastava, co-founder of GTRI, cautioned that trade interruptions might have a substantial effect should operations at Israel’s three main ports—Haifa, Ashdod, and Eilat—be impacted. These important ports are in charge of managing a variety of goods, including food, chemicals, electronics, machinery, and cars.
Eilat port serves as the primary point of entry for most goods traveling between India and Israel. It bears the title of being the largest for accommodating tourist cruise ships and ranks as the second-largest in terms of shipping containers.
India exports 1.8% of its total merchandise to Israel, with petroleum products being the main export. India sells Israel refined petroleum products for between $5.5 and $6 billion. India exported $8.4 billion worth of goods to Israel overall in FY23.
The unexpected attack by Hamas on Israel and subsequent declaration of war by that country have jolted the world economy, which is already in turmoil due to high inflation.
The potential of significant inflation is once again present as the price of crude oil rises. Oil is a key import for the United States, India, China, and other major economies, and if oil prices remain high, these countries may experience high levels of imported inflation. When oil prices rise, other industries’ production costs as well as the cost of energy for businesses and households also rise, which raises inflation.
