Israel, and china spinning the indian stock market..!?
Indian stock market investors data-faced heavy losses in the morning trade today, with the Sensex index down over 1200 points before opening morning trade. Similarly, all the sector-specific indices in the national stock market declined. The most important reason for today's collapse is israel and China. Investments worth around Rs 6 lakh crore have been eroded by the decline in morning trade. The indian market witnessed a major decline today (Thursday) as war tensions escalated between iran and Israel. Not only is America on Israel's side, but the united states is going to provide all the necessary assistance to the Israeli army, and the American army is going to work with the Israeli army. Although it is said that this will not break out into a major war because of the presence of the united states, there is no change in the fact that a retaliatory attack on iran will be very bad. At the same time, there are talks of new economic and trade sanctions being imposed on Iran. iran is already facing a worsening trade and economic crisis due to Western sanctions imposed on the country over suspicions that it already has nuclear weapons. In this scenario, the imposition of new sanctions on iran will have a major impact on the crude oil market.
International stock markets are facing a bad impact today due to this kind of crisis. Notably, there is no direct impact on the indian market from the Israel-Iran war. However, it is the impact on the US stock market and the crude oil market that has a major impact on the indian market. Tuesday's attack by iran on israel should have reverberated through indian markets on wednesday, but markets were closed on wednesday due to gandhi Jayanti, so the impact is all reverberating today. iran fired more than 200 missiles in retaliation for the killing of Hezbollah leader Hassan Nasrallah in an Israeli airstrike. The first impact after this attack was on the crude oil market. Its impact remains undiminished to this day. WTI crude oil rose 0.91 percent to $71.01 a barrel in the crude oil spot market today. Similarly, Brent crude oil price rose by $0.86 to $74.76 a barrel.
At the end of yesterday's trade, the main index of the US market, the Dow Jones Futures, fell 0.25 percent to 42,091 points. But the S&P 500 and Nasdaq escaped the slump with substantial gains. As a result, the Sensex dropped by 1250 points to 551 points within a few minutes of trading in the mumbai stock market today. china is the biggest fear of investors in India, and the Iran-Israel issue is secondary. The Chinese government's recent economic stimulus, lending rate, and interest rate cuts have made it a key market for foreign investors. Due to the Chinese government's restrictions, the share value of the companies in the Chinese stock market has decreased significantly in the last few years. As a result, Chinese company stocks were undervalued. At present, the Chinese government has not only reduced its benchmark interest rate from 1.7 percent to 1.5 percent but has also ordered funds worth 141.2 billion dollars through banks to improve the country's economy.
A $141.2 billion economic boost to already undervalued china stocks is the epitome of a double jackpot. Due to this announcement, investments from the international market have been piling up in the china market for the past week. In fact, due to indian stocks being overvalued, some international investments in the indian stock market have gone to the Chinese market. China's market will be the main reason not only for today's decline in the mumbai stock market but also for next week's decline. Along with this, the disruption in the US stock market due to the Iran-Israel attack will also create a huge impact on the indian market.