Iran-Israel war: Will Nifty bulls get trapped in cross-firing and how it may impact investors?
economictimes.indiatimes.comNifty could face knee-jerk reactions on Monday as equity investors are worried about the fallout of Iran's unprecedented full-scale military attack against Israel with more than 300 drones and missiles.
On Friday, Sensex had fallen nearly 800 points as FPIs were net sellers to the tune of nearly $1 billion amid worries related to the tweak in the India-Mauritius tax treaty and hotter-than-expected US inflation data. Analysts say the sell-off could extend on Monday as well.
«Everybody is cautious as the market is at an all-time high level. The Street is waiting for a reason to consolidate and geopolitical tensions could lead to a knee-jerk reaction. We need to watch closely how the tensions escalate,» Kranthi Bathini of WealthMills Securities told ETMarkets.
Also read | Mauritius issue begins to haunt foreign investors as FPIs pull out nearly $1 billion from Indian stocks
One of the biggest impacts of the tensions in the Middle East could be on crude oil prices. Last week, oil prices neared a six-month high on concern that Iran, the third-largest OPEC producer, might retaliate for a suspected Israeli warplane attack on Iran's embassy in Damascus.
After the fears came true on the weekend, analysts feared that crude oil prices, which had settled near the $90 a barrel mark on Friday, could cross the $100 level in the next few days.
Supply chain issues still carry the biggest risk premium as Iran maintains its threat to shut the Suez Canal, said Tim Snyder, economist at Matador Economics.
Higher commodity prices
