High crude may fuel worries for Indian equity markets: Deutsche

High crude oil prices are a big worry for the Indian equity markets which have had a not-so- good-year so far, Deutsche Bank (DB) Group said today.  

"High global crude prices are a short-term worry for the Indian markets...It is a big macro overhang which can hurt the markets," DB Group's Head of Equities Pratik Gupta told reporters here. 

Following the political turmoil in the West Asia and African nations, particularly Libya, oil prices have been surging and were in the over $100 a barrel range for some weeks.

DB's Head of Research, Abhay Laijawala, said if crude prices reach the $120-130 level and continue being there for a sustained period of over three months, there will definitely be an impact on the markets in India, which imports nearly three quarters of its annual crude requirement.

"I cannot say how much would be the impact in numbers, but the markets will be rangebound," he said.

DB Group expects the 30-share BSE Sensex, which closed 263 points down at 18,222 points today, to be at 21,000 points by end-2011. According to the bank, the long-term India story fueled by domestic consumption remains intact which will boost the markets. 

On the impact of the unfolding political situation with a major ally from the coalition at the Centre threatening to pull-out, Gupta said, "investors are used to coalitions for 20 years now. For mature investors, such developments cease to be an issue... Nobody is expecting the government to change."