Is Iran Israel war going to affect the stock market?

The stock market in India has given exceptional returns since 2020.

**Nifty 50 performance for the past year**

This upturn was challenged in the past owing to

Despite this, the Indian economy has been resilient and the reforms made have helped to grow the consumption, manufacturing, and entrepreneurial facets of the economy while keeping inflation below 7%.

**Indian Economy Growth Despite Pitfalls**

The possible reelection of the Modi government with a majority will strengthen the confidence among investors who are looking to park money in Emerging Markets, China+1 via FPI and FDI routes.

This though can come under threat due to the recent developments in the Middle East.

On the back of Israel’s attack on Iranian interests in Syria – Iran has launched missiles and drones towards Israel on April 13-14, 2024.

**Iran’s attack on Israel on April 13-14, 2024**

This development along with the existing geopolitical tensions can lead to the following in the short-term

Rise in Gold Prices
Rise in Crude Oil above USD $ 100
Panic Selling in the markets around the world (precursor for the same – Bitcoin falls by 7%)
Volatility in the stock markets (as other players will get involved in the sabre rattling)
Rise in cost of goods as the logistics chain will be susceptible to attacks

What should an investor do?

Sit on cash and deploy money after meaningful correction
Do not sell your investments under any influence like ‘expert’ advice or tips
Buy quality companies that have sustained their performance for the past decade and still growing
Use every opportunity of dip to nibble on stocks or mutual fund units

Hope this helps

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