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Published: April 15, 2024
Updated: April 15, 2024

Indian Stock Market Unfazed by Iran Attacks, Eyes on Israel's Response

Market Movement

The Indian stock market is unlikely to be significantly impacted by Iran's recent attacks on Israel unless there's a strong retaliation from Israel, according to market analysts. This is because a strong Israeli response could disrupt global crude oil supplies, leading to a price spike.

The Tel Aviv Stock Exchange's (TASE) benchmark TA-35 index, a key indicator of Israeli market sentiment, closed up 0.27% on Sunday despite the Iranian attacks. This suggests that investors are, for now, taking a wait-and-see approach.

Expert Opinions

Market analysts believe that the impact on the Indian market will depend on the following factors:

● Oil Prices: If oil prices rise due to supply disruptions, it could adversely affect inflation, current account deficit, GDP growth, corporate earnings, and the rupee.

● Escalation of Conflict: If the conflict between Israel and Iran escalates, it could lead to short-term volatility in the Indian stock market. However, analysts believe that any deep cuts are unlikely.

Current Market Scenario:

Following the missile strike on the Iranian consulate in Syria, Indian stock indices declined by over 1% on the next trading day. However, buying by domestic institutional investors (DIIs) limited the losses. Retail investors and high net-worth individuals (HNIs) turned bullish on Friday, while foreign portfolio investors (FPIs) trimmed their bullish bets.

Support Levels and Outlook:

Analysts believe that the uptrend in the Indian stock market could sustain as long as it doesn't break below the crucial support level of 21,800-22,000. The Nifty closed last week at 22,519.40. Weekly options data suggests support at 22,200 and resistance at 22,700. The Nifty is currently trading close to its all-time high of 22,775.7, reached on April 10th.

FPIs vs DIIs:

So far this year, foreign investors have been net buyers of Indian stocks, investing a total of ₹24,240 crore. Domestic institutional investors, on the other hand, have been even more bullish, investing a significant ₹1.2 trillion.

The Indian stock market is closely monitoring the situation in the Middle East. While Iran's attacks have caused some initial jitters, the overall sentiment remains positive. The market's reaction will depend on Israel's response and the impact on global oil prices.