Crude price rally to benefit Indian equities in the near term

There is a positive correlation between oil prices and Nifty50 over past 5 years

The Indian equity markets corrected on Wednesday after hitting a lifetime high earlier in the day. 

The benchmark Nifty50 index ended with losses of around 200 points, the biggest one-day fall in nearly a month. This sharp reversal was attributed to a rally in crude oil prices.

On Wednesday, Brent crude price hit an eight-month high of $48 to a barrel as traders bet on a faster-than-expected recovery in energy demand and a likely production cut by members of the Organization of Petroleum Exporting Countries (Opec) and Russia later this month.

Some analysts believe higher crude oil prices could significantly increase India’s energy