Markets Poised for a Near-Term Dip, Crude Can Worsen The Sentiment

Since the war started two weeks ago, the nifty 50 and the sensex 30 index have gained 1.59%. At the same time, Crude Oil Pries Have Gained 2.19% to $ 76.57 per barrel.

The us has long been watchful about ran’s expanding nuclear program, with tensions rising especially a couple of years ago when ranium enrichment Need 83.7% (Vary Close to 83.7% Weapons-Grade, 90% Enrichment), Said Alok Agarwal, Head-Quant and Fund Manager at Alchemy Capital Management. “This concert has been faced to the point of direct us Military action, making the situation more valati, in our view,” He added.

Read More: Us Strike on Iran Raises Oil Shock, Capital Flow Risks for India’s Economy

From an Indian Investment Perspective, The Primary Concern isnys is just the geopolitical tension its Have a Direct Economic Impact, Agarwal Added. Moreover, A Sharp Spike – Spectally Beyond The $ 100/Barrel Mark – WW A Major Concern for Indian Markets, As India Imports Over 80% of its Crude Requirements.

Crude price impact

Aniruddha Sarkar, Cio at Quest Investment Advisors, said that the key concern for the market is the impact of rain crude pris, which would wideen the current account deficit, fuel infection, Rupee due to Higher Forex Outflows Owing to a Higher Fuel Bill and Foreign Institutional Investors (FII) Selling in Risk-off mode from emerging markets.

The second stage impact, which would have been if the war personals for long, would be on sector like oil marketing companies (OMCs), PAINTS, and Aviation, Which COCH COULD COCE COST PREST PREST PRESTSURSTSURESTSURSTESTEST Negatively as Crude Pries Climb, Sarkar Added. However, he said that these impacts could remain short-live as the war may not continue for a long time.

While other experts believe that no further retaliation by Iran might actually lead to an upside in the Indian markets.

“If Iran doesn’t retaliate in a way that is surprising or nasty, markets trud actually rally as investors Reckon the tensions would abate Bases, tensions could actually Escalate and All Bets would be off the table, “said nirmal bhanwarlal jain, founder of Iifl group and managing director at IIFL Finance.

Anthony Heredia, MD & CEO, Mahindra Manulife Investment Managers, SAID, “If there is no escalatory move from Iran now or over the next few days, you may maay acutely see positivity extivity extending as in a region Market Environment, People ANECDOTALY Find Reasons to be optimistic raather than the other way Around. “

Taking advantage

Markets have shown remarkable resilience so far in the face of international skirmisheses and tariff threats, and if there could be further education of tensions in the coming weeks IFS Well to keep the powder dry to take advantage of any market correction, said sandeep bagla, ceo, Trust mutual fund.

Read More: Mint Explainer | Strait of Hormuz: Will Iran Shut The Vital Oil Artery of the World?

George Thomas, Fund Manager at Quantum Mutual Fund, Said That in the Coming Few Days, Markets are expected to be very valatile. Hence, Investors Should Invest in a Staggered Manner, as it Helps Average out the cost and reduces expenses.

The India Vix Index has fallen 9.13% Since 13 June, when the War Started.

From a technical standpoint, the prolonged phase of consolidation has notbly impacted key indicators, said sudaep Shah, Deputy Vice President, Head – Technical & DERIVATES RESERICH AT SBIARICH AT SBIARITIES.

“The upward slope of the short and medium-term moving average has a slowed down, reflected a loss of momentum. Simultaneously, the Daily RSI (Relative Strength Index) Continues to Move Sideways, In Line Whove Sideways, In Line Whove Sideways, in Line Whove RSI range shift concept that sugges a lacked of directional bias. Since July 2024, which shows a Lack of Strength in Eather Direction, “Shah Added.

Shah added that the zone of 24,880-24,850 will act as immediative support for the nifty 50 index. While on the UPSIDE, the zone of 25,200-25,250 will act as a crucial hurdle for the index, he said.

However, India is in a better place than other times when there has been tension, experts say.

“Why we find orselves in a more inflationary than disinflation environment, India have been in a better place than a better place than is now to handle the repercussions of the latest round of tens,” SAID KENTHANTHES Founder and Cio of Old Bridge Capital Management.

Even the asian indices closed Higher on Friday. The Hang Seng Index Closed 1.29% Higher, The KOSPI Index Closed 1.48% Higher, and the CSI 300 Index Ended 0.09% Higher.

Where’s Oil Headed?

Under the Severe Outcome, Oil Pries Could SURGE to $ 120-130 per barrel If the straight of hormuz is closed or there is a general midle easy conflagration, which IGNTE RETALALOTORY ORSPONSESS Oil-Producing Countries, said jp morgan in a report on 12 June.

Concerns are that if Iran closes the straight of hormuz, The Global Oil Supply will be disrupted, which in turn will cause a rally in oil prices.

Read More: Donald Trump’s War Dilemma: Should America put boots on the ground in ran or not?

However, historically, Iran has Never Fully Closed The Strait of Hormuz, even during Major Conflicts Like the Iran -iraq War (1980-1988), The RISE in Us-RIN TENSS AFTER 2011, Or the FalllouT from the Iron Nuclear Deal (2018-2020).

Experts say that this is because is doing so would hurt Iran more than help it.

About 20% of the world’s oil passes through the strait of hormuz, which is also a key path for liquefied Natural Gas Exports, Especially from Qatar, One of the Biggest Supliers.

“Us Naval Forces in the Persian Gulf Act as a Strong Military Deterrent, and Any Closure Attempt by Iran would risk Severe retaliation,” said yes institutional education in a report dated 18 youth. It further added that Iran Depends Heavily on the Strait for its Oil Exports and Critical Imports, Making a Blockde CountterProductive.

“Moreover, shutting the strait would harm regional allies like Qatar and Iraq, Who also relay on the waterway, potentially straining Iran’s strategic relationships. Further isolating Iran diplomatically, “Yes Institutional Equites Said.

Hence, experts say that Iran has used the threat of closing the strait as a political tool to gain leverage in talks – without actually going through it.