Mumbai: ICICI Securities (ISec) said India’s benchmark Nifty is better insulated from a potential oil shock triggered by the ongoing Gulf conflict than the broader small-cap and mid-cap universe, as the index has higher exposure to energy suppliers such as coal, electricity and upstream oil companies that could benefit from rising prices.

The brokerage said suppliers of energy in the Nifty, including companies in coal, electricity and upstream oil, will benefit from higher realisations. Meanwhile, demand for coal and electricity is likely to increase as users shift away from oil and gas as fuel inputs.

ICICI Securities said oil and gas suppliers, such as oil marketing and gas companies-the most impacted-are largely outside the Nifty and are spread across the small-cap and mid-cap segments. Energy-intensive industrials such as chemicals, fertilisers and building materials are also concentrated in the small-cap and mid-cap segments and are significantly impacted by higher crude and gas costs.

Within consumption, sectors such as aviation, autos, and consumer goods could be impacted by higher input costs, although larger companies within the Nifty can pass on costs and consolidate market share.

The brokerage said services sectors, including IT, banks and financials, which account for a large weight in the index, do not rely much on oil and gas, limiting the overall impact.