Rockets became shares of shipping companies between war in Iran and Israel, what is the reason for this boom?

Shipping Company Shares: The war between Israel and Iran has started. During this period, the shares of Shipping Corporation of India Limited (SCI) and GE Shipping Limited recorded 13 percent and 6 percent lead on Friday, 13 June respectively. Despite the decline in the market on the last trading day of the week, shares of these companies today were among those who made profits on the Nifty 500 index.

Shipping companies boom

Israel on Friday morning targeted the country’s nuclear structure and launched an air strike on the capital of Iran. Israel targeted 4 nuclear and 2 military bases of Iran from 200 fighter jet. It was only after this news that the shares of shipping companies saw a jump. The Baltic Dry Index has also climbed about 50 in the last one month. In June alone, there has been a bounce of 34 percent. BDI is a benchmark of the price of carrying raw materials by sea.

Shipping companies may get profits

Market experts say that GE shipping can get the benefit of increasing stress in the middle East. The company’s fleet includes up to 50 percent oil and product tankers. Experts believe that the rates of tankers may increase in the event of stress in both countries as the ship will keep distance from the Middle East in the event of war. Experts also say that Iran exports 2 million barrels of oil every day, which is 2 percent of global supply.

Why the shares of shipping companies rose?

Let us know that the shares of Shipping Corporation of India were among the highest earning shares on Nifty 500. The company’s shares are trading at around 14 percent to 235.41 today, while GE shipping shares are also trading 6.3 percent to 1,036. The reason for this rise in the prices of shares is a possibility of hindrance in the world’s most important shipping.

In fact, the fight in two hardcore countries of West Asia will affect the movement of ships in the Red Sea. India is dependent on this route for import-export in Europe, America, Africa and Western Asia. The ships of India bring goods from the Red Sea via the Suez Canal and carry them.

If tension in Iran and Israel increased, the movement of ships in the Red Sea will be affected and ships will have to carry goods through other alternative routes. This will increase the cost of shipping. In such a situation, there is scope for shipping companies to make profits.

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