262 The global economy is grappling with the repercussions of the Israel-Hamas conflict, with potential ramifications intensifying if the unrest extends to other Middle Eastern countries, particularly Iran, a significant oil producer and Hamas supporter. The recent Palestinian assault of over 5,000 rockets on Israel, and Israel’s subsequent declaration of war, has amplified concerns. The conflict has resulted in over 700 casualties and has sharply heightened global oil prices. Elevated Oil Prices The Middle East tension propelled crude oil prices, with Brent crude surging 3.44% to $87.49 per barrel and US West Texas Intermediate crude rallying 3.85% to $85.98 per barrel. Although immediate oil supply disruptions remain contained, an expansion of the war could trigger an alarming escalation, potentially involving the US and Iran. Inflationary Pressure The surge in oil prices poses a threat to global inflation, particularly for major oil-importing economies such as the United States, India, and China. As production costs rise, industries face heightened operational expenses, which could lead to an extended period of elevated inflation and interest rates. Trade Impact on India While India’s trade with Israel has not yet witnessed significant immediate consequences, supply-side disruptions loom if the conflict persists. India’s exports, primarily petroleum products, account for 1.8% of the total merchandise exports. Conversely, India imports machinery, pearls, diamonds, and other precious stones from Israel. Market Volatility The conflict has induced market volatility globally, prompting investors to shift towards safer assets, with gold prices rising over 1%. The US dollar and the Japanese yen have also gained ground. The ongoing situation urges caution, with a wait-and-watch approach advocated for investors. While the Indian stock market is not immediately impacted, closely monitoring the situation is imperative. Technically, Nifty 50’s critical demand zone ranges between 19,300–19,250, with potential corrections if this range is breached. Long-term investors are advised to remain vigilant for potential buying opportunities. Amidst the evolving scenario, tracking global market reactions and upcoming corporate earnings and elections remains crucial for market trajectory analysis. You Might Be Interested In Why Modi Faces Rejection in India’s South — And Its Significance Octopus Energy Explores Green Energy Project in Sierra Leone with Sherbro Alliance Partners BorgWarner Collaborates with Manufacture 2030 to Cut Supply Chain Emissions $550 million investment in India’s education sector by Singapore’s Global Schools Elon Musk Proposes Robotaxi Testing in China, State Media Reports International Year of Millets 2023: How does it help farmers, Startups & Businesses?
