The Indian stock market has enjoyed a six-day rally despite the ongoing conflict in the Middle East, leading many to question whether this trend will continue or if the geopolitical tensions will finally halt the upward momentum.
As investors keep a close watch on the situation, experts are offering insights into how the conflict might affect Dalal Street in the days to come.
Despite the uncertainty arising from the Middle East conflict, Indian stocks have surged, with benchmarks like the Sensex and Nifty showing strong gains.
Over the past six sessions, the Indian market has added significant value, boosted by strong corporate earnings and global factors like steady foreign inflows. However, many investors are now concerned that the conflict could create a drag on the market’s performance.
Impact of geopolitical tensions on stock markets
Geopolitical events, such as conflicts and wars, often lead to sharp reactions in stock markets around the world.
The uncertainty surrounding these events tends to make investors cautious, resulting in volatility. While short-term disruptions are expected, historical data indicates that markets typically recover once the initial shock fades and a clearer picture of the economic impact emerges.
Vinayak Mehta, Founder of The Infinity Group, commented on this aspect, saying, “Geopolitical tensions can trigger immediate volatility in global stock markets, primarily due to the uncertainty they introduce. Markets often react sharply, with declines as investors seek clarity on how these events will impact economic stability and growth. However, markets tend to recover over time as the initial fear subsides.”
