Israeli war's spillover into Iran might hurt world stocks and increase petroleum prices.

Israel has given a very strong verbal counter, but investors are watching if this conflict spreads to other areas like Iran.

Indian equity markets fell on October 9 amid global headwinds from volatile global markets, Israel-Hamas War and rising crude oil prices. Crude oil prices jumped 3-4 percent in the early morning trade, with Brent crude shooting past $87.4 a barrel and WTI crossing the $85.7 mark. Market observers believe that the surprise war would have wide-ranging ramifications and repercussions across geographies, economies and sectors.

Consequences of Israel-Hamas War: All eyes on spillover into Iran

Israel has given a very strong verbal counter, but investors are watching if this conflict spreads to other areas like Iran, said Sunil Singhania, Founder – Abakkus Asset Manager LLP. “It is not an event to be ignored. But it’s the early days. We need to wait and watch the next few days. India has been resilient thus far, but no market can remain immune to such global events,” Sunil Singhania told FinRollNews.

HDFC Securities, too, the fallout in markets will likely be determined by whether conflict spreads to the rest of the Middle East region, with oil traders also shifting focus to Iran, which is both a major oil producer and supporter of Hamas. “Any further major escalation of hostilities between Israel and Palestine could impact risk appetite globally and lead to weakness in the global markets,” he said.

“There will be volatility in the bond and equity market temporarily. Bond yields will harden, cost of credit may go up for companies, and crude prices will rise if it spills over to the Middle East. Gold may become a safe haven,” said Manoranjan Sharma, Chief Economist, Infomerics Ratings.  Despite the concerns, market experts advise caution and patience before making any decisions.

founder and fund manager at Helios Capital, “We have to wait and watch the situation. We cannot judge how this will pan out going ahead.” He steered clear of taking any large calls. “Last time, after the Russia-Ukraine war, we did that, but the market did not really go down as much as we thought.”

“The overall market sentiment does look a bit weak because of rising yields. However, whether Israel by itself will trigger a big fall is a difficult call to make. Any sharp fall, we will look at it as a buying opportunity,” said Samir Arora.

Oil above $95 a barrel: A major concern

Oil above $95 a barrel: A major concern,  Israel stock market, Israel share Market.

Meanwhile, Rahul Sharma, director at JM Financial Services, when the US markets were set for a reversal, the Israel war news has made market participants nervous. “Something to keep an eye on is especially oil if it crosses $95 a barrel. Bears may finally get a hard-landing that they have been hoping for. It would be best to be a day trader until this crucial resistance is not taken out,”

Santosh Meena, Head of Research, Swastika Investmart believes that the ongoing conflict in Israel is an unforeseen event impacting the market, and its effects may take some time to be fully absorbed. “Monitoring the situation closely, especially regarding the potential involvement of other actors like Iran, is essential as the possibility of a third front involving Iran could trigger a sharp increase in crude oil prices,” he said.

Nifty Outlook

A technical standpoint, the 19300–19250 range is a critical demand zone for Nifty. Until the market stabilizes within this range, it is likely to remain in a sideways pattern, facing a notable obstacle at 19800.

A breach below 19250 could lead to a healthy correction in Nifty, potentially reaching the 18800 level. “For short-term traders, it’s advisable to exercise caution and not rush into trades. On the other hand, a substantial correction could present an excellent buying opportunity for long-term investors,” said Meena.

By bemaad

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