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Oil Price Inversely Correlated To Market Sentiment

By Anna Peel. Originally published at ValueWalk.

High Energy Prices Oil

Below are market comments from Mihir Kapadia, CEO of Sun Global Investments, on geopolitics and oil prices.

Geopolitics Continues To Define Day To Day Market Movements – Oil Price Inversely Correlated To Market Sentiment

“The market prediction for 2022 was muted but stable growth, however the global economies are currently experiencing a significant negative shock due to inflation, rising interest rates, a war and resurgent Covid.

The reason why we factored lower growth in 2022 was due to markets having largely factored the steady recovery already made in 2021 after the lockdown. But substantial new challenges have since emerged which threaten a significant downturn.

Apart from extremely high inflation, the Russian war on Ukraine, sanctions, and covid cases continue to have significant impact on markets.

China is currently facing a new covid-19 outbreak, with cases hitting a two-year high and sending millions into lockdown. Risk assets have retraced significantly and the Nasdaq is now technically in bear market territory.

Geopolitics continues to define day to day market movements, and investors are grasping on any signs of easing tensions to get  invested into markets.

It currently appears that we have a new barometer for the markets – oil prices are inversely correlated to the market sentiment.”


About Sun Global Investments

Sun Global Investments Ltd. is an international financial services firm based in London, providing a full scope of services to institutional investors, corporate companies, family offices and high net worth individuals. Established in 2008, in the midst of turmoil in the financial services industry, Sun Global identified lucrative investment opportunities in emerging market corridors and has since established itself as a trusted boutique firm for investors looking to take advantage of these versatile markets.

The company has three core functionaries: Wealth Advisory, Corporate Finance and Securities Trading. Wealth Advisory specialises in Portfolio Management, Lifetime Investment & Inheritance Planning and Family Office functions; Corporate Finance specialists work on M&A, Fundraising, Equity/Debt Capital markets, Restructuring and Special Situations; Securities Trading is the bedrock of the business with the team liaising with over 150 market counterparties in Fixed Income, Bonds, Equities, FX and Commodities to provide the best pricing for clients.

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