Mumbai, June 17 -- Optimism is bubbling up on the Street as West Asia heads for peace, after over 100 days of war that shut shipping routes, rocked energy markets and upended supply chains worldwide. Market participants expect a wide range of industries to gain from a return to normalcy, even as they keep a wary eye on the durability of a peace deal that is yet to be signed. The US unleashed Operation Epic Fury on 28 February, assassinating Iran's Supreme Leader Ayatollah Ali Khamenei and launching devastating attacks across the country. Tehran struck back at US allies in the region and shut the Strait of Hormuz, sparking energy shortages and supply chain disruptions worldwide. The end of the war promises to benefit a range of crude-sensitive sectors by lowering oil prices, reducing disruption risks and easing freight and insurance costs, brokerages and analysts said. If Brent crude settles at $75-85 a barrel over the next 12 months, these sectors could see the biggest earnings upgrades, they said. On Tuesday, the August contract for Brent crude traded at $79.11 per barrel, against $138 during the height of the war. "We believe stock-specific opportunities are available," said Sumit Pokharna, senior vice-president, fundamental research, Kotak Securities, even as he pointed to the market scepticism after several failed peace moves. That said, he believes the market correction has been deep enough that the subsequent recovery has not yet fully captured the improving fundamentals. "If crude oil prices remain lower, earnings upgrades could be on the cards for sectors such as aviation, refining, lubricants and paints," said Pokharna. Among NSE's sectoral indices, the PSU Bank index was the worst-hit, tumbling 13% since the start of the war. It was followed by Nifty Oil & Gas (down 10%) and Nifty IT (down 9%). For Nifty PSU Bank and Nifty Oil and Gas, the plunge came after a stellar run-up in the year before the conflict, rising 69% and 25% respectively, while Nifty IT was a laggard, falling 21%. According to Sunny Agrawal, head of fundamental research at SBI Securities, aviation could be a key beneficiary, given that fuel accounts for nearly 40% of airline operating costs. With jet fuel prices easing and policy support remaining strong, IndiGo, India's largest airline, could see earnings upgrades over the next one to two quarters, Agarwal said. As travel demand normalizes, aviation-linked plays such as GMR Airports, as well as travel and food-service companies, may also benefit. As the conflict unfolded, the Indian government approved a Rs.10,000-crore price stabilization fund to shield domestic airlines from soaring jet fuel costs. The civil aviation ministry also directed a 25% reduction in landing and parking charges at major airports while providing temporary relaxations in pilot flight duty time limitations. Agrawal of SBI Securities also sees lower oil prices supporting commercial vehicles, which tend to suffer at times of fuel price hikes and economic uncertainty. This could improve earnings prospects for Tata Motors, Ashok Leyland, and vehicle financiers such as Shriram Finance and Cholamandalam Investment and Finance. Cheaper oil could also lower packaging costs and support margins at consumer goods companies such as Hindustan Unilever, Godrej Consumer Products, and Bajaj Consumer Care, Agrawal said. Agrawal believes oil marketing companies (OMCs) could emerge as the biggest winners. Companies such as Indian Oil, BPCL and HPCL are likely to gain from lower crude procurement costs and improved marketing margins. Refiners could also gain from cheaper crude, although the impact will depend on refining spreads and product demand. OMCs raised petrol and diesel prices by Rs.7.50 per litre each in May. Alongside, the price of a 14.2-kg domestic LPG cylinder was raised by a total of Rs.89, pushing the retail cost of a household cylinder in Delhi to Rs.942. A Nomura report on 15 June said OMCs, city gas distributors and Petronet LNG stand to benefit the most from a potential reopening of the Strait of Hormuz. In contrast, upstream players ONGC and Oil India could face the maximum negative impact due to lower realizations from crude oil and gas. For Reliance Industries, Nomura sees a moderately negative impact, with lower refining margins likely as West Asia refining capacity returns. However, this could be partly cushioned by higher off-gas availability for its petrochem business if gas pooling norms are relaxed. To protect public utilities and agriculture from severe West Asia supply shocks, the government mandated 100% natural gas allocation for domestic PNG and CNG, while prioritizing 70% of normal supplies to fertilizer plants. Market participants pointed out that sectors that use crude oil derivatives like paint and adhesive makers also stand to gain from softer prices of crude-derived inputs such as solvents, synthetic rubber and petrochemicals. Some pointed out that chemical and specialty chemical companies could see lower feedstock costs and improved competitiveness, while logistics, shipping and transportation firms may benefit from reduced fuel bills, lower war-risk insurance premiums and smoother trade routes. Kotak Institutional Equities expects growth in the domestic medium and heavy commercial vehicle (M&HCV) industry to ease to low single digits in FY27 after a strong FY26, mainly due to a high base and the fading impact of GST-led demand frontloading. Yet, a potential US-Iran deal could keep crude and diesel prices on a downward trajectory, the brokerage noted in a 15 June report....