In a sudden escalation of the Israel-Hamas conflict, Dalal Street investors find themselves on shaky ground as fears of a sharp spike in crude oil prices grip financial markets worldwide. The unexpected attack by the Palestinian terrorist group Hamas on Israel has sent shockwaves through stock market circles, with experts warning of a potential geopolitical crisis with far-reaching implications, including for India’s equity markets.
Global stock markets are under immense pressure following Hamas’s offensive against Israel, exacerbating concerns over already high crude oil prices due to reduced supply from major oil-producing nations. The prospect of a sudden surge in crude oil prices stemming from this conflict has rattled financial markets, evident in Dalal Street’s reaction, where benchmark indices plummeted steeply on Monday.
Around 11:35 am, the S&P BSE Sensex saw a drastic drop of over 300 points, and the NSE Nifty 50 experienced a decline of more than 90 points, leading to a surge in volatility in domestic-focused broader markets.
Experts have weighed in on the potential repercussions of the Israel-Hamas conflict. Santosh Meena, Head of Research at Swastika Investmart, expressed deep concerns about the situation. He emphasized its unforeseen impact on the market, cautioning that it might take time for the effects to fully set in. Meena highlighted the looming concern of a third front involving Iran, which could significantly spike crude oil prices, creating further instability in the market.
From a technical perspective, Meena analyzed the situation, indicating a critical demand zone for the Nifty in the 19,300–19,250 range. He suggested that until the market stabilizes within this range, it is likely to remain in a sideways pattern, facing a notable obstacle at 19,800. While he advised short-term traders to exercise caution, he also noted that a substantial correction could offer a strategic buying opportunity for long-term investors.
Palka Arora Chopra, Director at Master Capital Services Ltd, echoed concerns about increasing geopolitical risks in the Middle East. She pointed out that these risks could lead to higher crude oil prices and heightened volatility in the equity market, potentially impacting domestic inflation and interest rates. Chopra highlighted sectors such as paint and chemicals as vulnerable, with rising crude oil prices posing a threat to their profit margins in the short-to-medium term.
Investors are urged to closely monitor the duration and nature of the conflict, as its longevity could significantly impact global markets. As the situation unfolds, the investment landscape remains uncertain, demanding vigilance and strategic decision-making from investors worldwide.