Benchmark stock market indices crashed after opening for trade on Friday, over rising geopolitical tensions with Israel launching an attack on Iran. Oil prices rose after the news of the rising conflict in the Middle East.
The S&P BSE Sensex tanked 838.78 points to 80,853.20, while the NSE Nifty50 lost 252.80 points to 24,635.40 as of 9:25 am.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited said that close on the heels of the Ahmedabad air tragedy has come the news of Israel’s attack on Iran.
“The economic consequences of this Israeli strike can be profound if the attack and counter-attack by Iran lingers long. Israel has declared that the operation will last several days. Brent crude prices have flared up by around 12% to $78. It can rise further if Iran in retaliation closes the straight of Hormuz severely restricting oil supply,” he added.
The impact on market will depend on how long the conflict lingers. In the near-term the market will be in a risk-off mode. Sectors that uses oil derivatives as inputs like aviation, paints, adhesives and tyres will be hit hard. Oil producers like ONGC and Oil India will remain resilient.
Investors can wait and watch how the situation unfolds. Nifty is likely to get strong support at 24500 level.