Experts in the stock market predict that the American airstrike in Syria could negatively affect the Indian stock market the following week. On Friday, the Indian stock market started off lower but quickly reversed course and went positive thanks to strong advances by important benchmark indices.
The Indian stock market started the day Friday negative but swiftly recovered, becoming positive due to huge gains achieved by crucial benchmark indices. Yet, following the announcement of the US air campaign in Syria, which has heightened tensions in the Middle East, Indian equities fell and ended in the red zone for the second consecutive session. The BSE Sensex fell 398 points to settle at 57,525 while the Nifty 50 index fell 131 points to close at 16,945. The Nifty Bank index fell 221 points and closed the Friday session at 39,395 points.
According to stock market experts, global markets, including Dalal Street, are already under pressure due to the bank crisis in the United States and concerns about an impending economic slowdown, and this new geopolitical tension in the Middle East may dampen the prospects of a pullback rally when the market opens next Monday. They stated that the Indian stock market, like any other global market, cannot afford any further strain because they already face enough hurdles in the future sessions. They suggested short-term investors to search for solid agriculture and fertiliser firms to buy if tensions in the Middle East develop further. However, IT remained the preferred investment sector for long-term positional investors.
SEBI Registered Analyst Avinash Gorakshkar commented on how a US airstrike might affect the Indian stock market. "The news of the American airstrike in Syria broke just as Indian stocks were recovering from losses on Thursday and in the morning. Most of the important benchmark indexes had gone green with significant gains, but only hours before the market closing, this new geopolitical tension emerged, prompting a sell-off on Dalal Street." Avinash Gorakshkar further claimed that global markets including Dalal Street is already under the stress of banking crisis in US and anticipated economic slump. Hence, in case, this Middle East conflict further intensifies, then Nifty would not be able to retain its October 2022 low of about 16,800. Gorakshkar advised investors to monitor crude oil prices when the market opened on Monday because any increase would signal a new round of market selling.
Avinash Gorakshkar advised investors to purchase stocks on Monday to protect themselves from any potential effects of a US airstrike in Syria "Companies that produce oil, carbon black, and lubricants will be directly impacted by a rise in crude oil prices on Monday, and their stocks are anticipated to trade poorly on that day. Nevertheless, higher crude oil prices also mean growing inflation. It will therefore indirectly affect other divisions as well. Yet, it is anticipated that the Technology and fertiliser sectors will be protected from current geopolitical stress."
