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Below the Comment on - Escalating Conflict in the Middle East and Its Potential Impact on the Indian Stock Market? by Mr Shrey Jain, Founder and CEO SAS Online - India's Deep Discount Broker

The escalation of conflict and seizure of cargo ship by Iran may increase volatility in the global equity markets including India. The world will watch the response by Israel and the G7. Further escalation in the conflict may lead to a hike in crude oil prices and in turn push inflation upwards. This reduces the chances of rate cut and in turn valuations of stocks, including Indian equities, especially at a time when they are not trading cheap.

Indian exporters may see an increase in costs be it tariffs or time to delivery. This should hamper the margins and the market participants should discount the same quickly by selling such counters. Stocks of oil marketing companies too should be watched out for. Sustained high crude oil prices, lower margins and inability to pass on higher prices ahead of elections, should act against OMCs. Investors may prefer domestic power sector stocks and pharmaceutical stocks as defensive plays in a volatile phase of the market. Select large cap capital goods, defence and infrastructure stocks can be bought at lower levels. Traders should strictly follow stop loss in their open positions.

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