The fight between Iran-Israel for 10 days has been afraid of falling the market. The fear of the market has increased further due to the direct jumping of America in this fight on 22 June. Moneycontrol interacted with Milind Muchhal, executive director of Julius Bare India to understand the situation and help the investors. He said that as far as Iran-Israel is concerned, we have to see what kind of form this fight is taking. Second, how long this fight continues and what effect does it affect on the supply chain. Especially what is the status of Straight of Hormuz.
A big opportunity to increase the decline investment in market
Muchhal said that geopolitical tension (Iran-Israel War) Due to the short term correction may come. However, this will be a big opportunity for investors to increase investment in shares. He said that the world has been facing geopolitical tension for the last three years. First, the battle of Russia and Ukraine began which is still going on. After that there was a conflict between Israel-Hamas. Now Iran and Israel are fighting. The biggest impact of this fight (Iran-Israel) is that the crude oil has become 20 percent expensive. Earlier in the last one year, it was showing a decline.
Crude supply will not cause major interruption
He said that the fight between Iran-Israel may increase. However, the reserve of creed oil is quite large, which will not bring a major obstacle in its supply. Second, due to lack of demand, oil prices are expected to soften. Therefore, expensive crude will not have much effect on inflation. Here, the situation in India seems quite excited. Inflation is under control, which has a big hand to soft in food prices. Because of this, our perspective about shares is positive. I believe that every decline of the market will give investors a chance to increase investment in shares.
Consolidation shown in the market due to shares being expensive
Will the market move towards a new height only after increasing the earnings? In response to this, Muchhal said that the market is a slave of Arnings in the long term. However, it affects the Central and Technical Factors in the short term. In the last one year, most of the consolidation has been shown in the market. There has also been a lot of ups and downs in the middle. The big reason for this is that the prices of shares had surpassed the fundamentals.
Earnings growth expected to grow in quarters
Earnings growth was seen to be sluggish due to many reasons. These include a decrease in the government’s revered expenses, weakness in consumption, strict monetary conditions. However, many of these things have become positive in the last 2 months. The RBI has given the market a gift of large decrease in interest rates. Monsoon rains are expected to be good. This will increase the consumption. This will increase the earnings in the coming quarters. However, the Earnings growth in FY26 is expected to be in a single digit.
