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- Iran Israel tension flared up further over the weekend with Iran initiating a series of Drone attacks on Israeli soil. Though the same had been intercepted and neutralized by US Jordan and Syrian radars and the damage was restricted Israel has warned of retaliation
- Biden on his part though has warned Iran of a counter action if the tension flares up but seems like in one on one conversation with Netanyahu he’s advised against further retaliation, in a way telling that Israel will have to defend itself on its own
- As if the interest rate uncertainty was not enough for global markets the flaring up of middle east tension has taken the market into a tailspin of sorts. Dow closed lower by 475 pts on Friday and the market weakness is expected to continue going into the week
- Dollar will get a fresh lease of life as investors will head towards safe haven and we may see a flare up in Dollar index that can now potentially head towards 107.50; however this time the metals will also be a party and Gold may rebound and head towards USD 2450 a level it had almost kissed and the losing instrument seems to be Bitcoins as the crypto is trading 7% lower close to USD 61k
- Expect some upswing in the crude prices though for now at USD 90 a barrel there still seems to be some order in the oil market. The question one may ask – will it hit the 3 figure mark? There is a chance that it can this time and that leaves us with other questions
- What will happen to inflation and in turn rates and if that’s the case what will happen to equity indices. Further pain seems to be on cards as for now wall street is hardly 5% lower than its lifetime high
- Coming to India while the official version is that we are not affected by the tension in middle east but it’s not that simple to ignore. We are bound to get affected as we are one of the major economic stakeholders. Oil price hike will impact us
- Nifty had a tough run on Friday and market witnessed a fall of 235 pts fall. This was an unusual one as generally the market used to end with a hope for next day but this time the scare has been carried on into the next day
- A gap down opening is not ruled out and will the market be able to bounce back. It’s not going down for economic fundamentals but on geo polity and no matter we may say what we want to, we are going to have sluggishness till the time the middle east cools off
Stay safe, stay healthy, God bless you all, have a great day and a profitable year ahead of you all!!
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Vikas Miglani writes 