Impact of Iran-Israel conflict on Indian stock market: What Samir Arora concludes

Amid the flaring up of tensions between Iran and Israel, following the former's retaliatory move, market veteran Samir Arora did a 'through' study on of the evolving geopolitical situation and its impact on global markets and Indian markets and his stocks in particular.

Arora said he also took into account the number of seats BJP/NDA can win in the forthcoming elections and the Union Budget that will follow. After  separately looking at how China is doing and investors frustration with their returns from China; and also inflation in the US and whether the Fed rate cuts will come later this year or next year, he came to conclusion: "No one knows anything about anything, beyond a point."

In a post on X, which received over 59,200 views so far, Arora of Helios Capital said one should focus on owning a diversified portfolio of stocks that cannot be eliminated on any "bad" factor.

The escalation in the Middle East tensions sent market tumbling for the second straight day. At 2.15 pm, the BSE Sensex was trading 72,907.72, down 492.06 points or 0.67 per cent. The NSE Nifty stood at 22,148.45, 124.05 points or 0.56 per cent.

Israel’s military chief in a statement said that “there will be a response to Iran’s attack on Israel”, which has increased the probability of escalation of tensions in the Middle East.

It is believed that if Iran successfully enforces a complete or partial blockade of the Strait of Hormuz (SoH, crude oil prices may rise materially. While alternative routes do exist, they may only be able to accommodate a fraction (7-8mnbopd of crude oil/refined products) of the volume currently passing through the SoH (21mnbopd), and that too at elevated freight costs.

"Long-term investors can slowly accumulate high quality large-caps on corrections. Further corrections will make valuations of large-caps fair. Largecaps in banking, IT, autos, capital goods, oil & gas and cement are ideal for long-term investment.  Since metal prices are firming up, metal stocks will remain resilient," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.