Stock market: The Indian stock market is expected to start with a decline on June 23. The United States has an airplane on Iran’s nuclear sites, after which geopolitical tension in the Middle East has intensified. This has increased the ‘risk-off’ sentiment in global investors, which can put pressure on markets around the world.
Fear of fall in Nifty-Sensex by 1%
Analysts believe that Nifty and Sensex may fall from 0.7% to 1%. Especially oil-sensitive sectors such as airlines, paints and FMCG sectors can be affected.
On June 20, the market closed with a strong lead. The Sensex rose by 1.29% or 1,046.30 points and closed at 82,408.17. At the same time, the Nifty 50 index rose by 1.3% or 320 points and gave closing at the level of 25,112.40.
Which level will be important for Nifty?
Akshay Chinchkar of Axis Securities said, “As long as Iran’s response is not clear, the risk-off sentiments will remain in the market. If the Nifty does not go above 25,243, it can go downwards. Nifty can slip up to 23,700 when declining by 24,462.”
He said that Momentum Indicators are not overbott, so the market move will depend entirely on the headlines.
Impact on crude prices and India’s concern
America’s Iran may boom after the airplacing prices, as 20% of the world’s oil is imported through the Strait of Hormuz. The danger of disrupting supply of that route has increased.
India imports more than 85% of its energy needs, so an increase in crude oil prices by $ 10 per barrel can increase the current account deficit of GDP to 0.3% and also put pressure on inflation.
‘Markets are in risk-off mode’
Market expert Ajay Bagga said, ‘At this time the markets are completely in risk-off mode. American and Asian futures may bring some more clarity tonight. There is a possibility of gap-down opening in Asian markets and funds can go to safe-hevan assets. ” ‘
Trump warns of further action
The US has officially attacked Iran on three nuclear sites. President Trump has warned that the US will take more strict military action if Iran retaliated, but at the same time he has also appealed to reduce tension.
Crude can cross $ 100
VK Vijaykumar of Geojit Financial Services said, “The direction of the market will be completely dependent on what Iran reacts. If Iran damages the US military or resources, the US may intensify and crude oil prices can be speeded up and crude oil prices can come out above $ 100 per barrel. But if Iran can only give a symbolic response, then the market can ride after the beginning.”
Will the market be handled after the initial decline?
Sunny Aggarwal of SBI Securities believes, “Until Iran’s response is very aggressive, markets can overcome this geopolitical noise. Even though the beginning declines, the markets can be closed with flat or mild growth by the end of the day.”
It is necessary to monitor oil prices
Nilesh Shah, MD of Kotak Mahindra AMC, said, “Indian equity and bond markets are currently like a person whose leg is in cold water and in the other hot.” He said, “Domestic factors are currently supporting market valuation, but global factors, trump policy, oil price and supply are on boil.”
Shah says, ‘We need to keep an eye on oil prices and availability closely. Currently we have enough foreign exchange reserves, so that double digit crude price can be handled, but if prices reach in three digits or supply stops, it will have a negative impact on the market.
Expert advice for investors
Shah believes that the current decline may give long -term investors a chance to buy good quality stocks at a low price. However, he has advised traders to be vigilant due to much instability.
He said, “Traders should be very cautious. But long-term investors can see this decline as a purchase opportunity.”
Also read: Stocks to Watch: 10 stocks will be in focus on Monday amidst Iran-Israel War, big stir can be seen
Disclaimer: Advice or idea experts/brokerage firms given on Moneycontrol.com have their own personal views. The website or management is not responsible for this. Moneycontrol advises to users that always seek the advice of certified experts before taking any investment decision.
