Israel-Hamas war: Impact on Indian stocks
Geopolitics is often ignored in financial markets. For reasons best known to them, investors and traders don’t think it’s as important as other factors that move markets. The best example of this was the Russia-Ukraine war.
Russia’s preparations for the war were apparent about a year before the start of hostilities. In fact the writing was on the wall at least a few months before February 2022. Yet hardly anyone in the financial markets wanted to believe it back then.
Up to a few days before the war, people were exchanging memes on social media about how Ukraine hadn’t been attacked. The entire global financial market sentiment changed on 22 February when the war began. It shouldn’t have been a shock…but it was.
We all remember the carnage that followed in the stock market. Well, geopolitics is back dominating the financial headlines again. But there is a difference this time.
It wasn’t easy to see the Israel-Hamas war coming. Everyone knew about the tensions in the region but no one could have anticipated the scale of the hostilities. Once again both investors and traders will have to reassess the market situation as well as their personal portfolios.
The big questions are how will the war change the macro picture for the Indian markets and which stocks will be badly affected? Let’s dive into the answers… The first and most obvious impact on the market is the negative sentiment this war will bring with it. Indian stock markets were expected to fall in a knee-jerk response today…and they already have. The other macro level impacts will be on crude prices and the US dollar.
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