In financial markets, the movement in the commodities prices affects the other segments of the market such as equities and bonds. However, it is not influenced by them much. But, that does not mean that it has no influence on the value of equities and bonds. In fact, it also impacts the other sectors such as retail, auto, healthcare, retail, and much more.

It is because commodities are goods that largely consumed by us for different purposes. They also happen to be our necessities. Any fluctuation on commodity prices impact on both consumer and sectoral level. Here, we’re going to discuss how the movement in commodity prices like metals, bullions, and food impact the other sectors as well.

REAL-ESTATE SECTOR

Real-estate is one of the most recognized sectors in the global market which subdivided into – housing, retail, hospitality, and commercial. Recently, the Indian real estate sector has witnessed tremendous growth due to the high demand for office and residential spaces. As of now, real estate also happens to be one of the largest employers in the global market.
A lot of commodities used in this sector as inputs. If we leave the ‘land’ then still there are other commodities such as iron, wood, steel, and other metals that use in the real-estate sector. Any fluctuation in the prices of iron or steel can immediately affect the prices of real estate. If prices of commodities rise, the sales will decline, the employees will start getting low wages eventually, and there will be less demand due to high prices of materials that majorly used as raw materials in this sector, and vice-versa.

AUTO SECTOR

Like real-estate, the auto sector is also the major contributor in the Indian economy. The Indian automotive sector has now become the 7th largest manufacturer of commercial vehicles in the world. It is a heavy automobile manufacturing industry which employs a large no. of people. Many commodities like crude oil and metal are used as inputs here. Therefore, demand and supply play a major role in the auto sector where any fluctuation in crude oil prices can affect the overall sales of automobiles. The rise in crude prices or metal prices could lead to the rise in the automobile prices which make it difficult for consumers to afford which ultimately lead to…

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