How US air strike in Syria may impact Indian stock market next week?

According to stock market experts, global markets including Dalal Street is already under the heat of bank crisis in US and looming economic slowdown worries and this new geo-political tension in the Middle East might dent the prospects of pull back rally when the market opens on Monday next week. They said that Indian stock market or any other global market can’t afford a new tension as they already have a lot of challenges to face in upcoming sessions. They advised short term investors to look at quality agriculture and fertiliser stocks to buy if the Middle East tension further escalates. However, for long term positional investors, IT remained their favourite sector for investing.

Global triggers for Indian stock market

Speaking on how US air strike would impact Indian stock market, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “US air strike news in Syria came at a very bad time as the Indian stocks were recovering from the morning losses after losing on Thursday session. Most of the key benchmark indices had turned green with handsome gains but just few hours ahead of the market close, this fresh geo-political tension arrived, triggering sell off trigger on Dalal Street.”

Avinash Gorakshkar further said that global markets including Dalal Street is already under the stress of banking crisis in US and looming economic slowdown. So, in case, this Middle East tension further escalates, then Nifty might not be able to sustain its October 2022 low of around 16,800. Gorakshkar advised investors to keep an eye on the crude oil prices when the market opens on Monday as any rise in crude oil prices would be an indicator of fresh sell off in the markets.

Buy or sell stock for Monday

On stocks to buy on Monday to remain safe from potential impact of US air strike in Syria, Avinash Gorakshkar said, “If crude oil prices jumps on Monday, then oil producing companies, carbon black and lubricant maker companies will come directly under the stress and their stocks are expected to trade weak on Monday. But, rising crude oil price means rise in inflation as well. So, it will have indirect impact on other segments as well. But, IT and fertilizer sectors are expected to remain insulated from this geo-political tension.”

On which stock to buy in current geo-political crisis, Ravi Singhal, CEO at GCL Broking said, “In IT segment, TCS is expected to outperform the major mid-cap IT stocks in India. If it becomes available at around ₹2850 to ₹2900 apiece levels, then it would be a big opportunity for long term positional investors to buy this Tata stock. Similarly, in fertilizer segment, one should look to buy GNFC and Chambal Fertilizers for one to one and half month for 8-10 per cent gains from current levels.”

As per the release issued by the US Depart of Defense, US conducted air strike in Syrian in response to deadly UAV attack. 

“At the direction of President Biden, I authorized US Central Command forces to conduct precision airstrikes tonight in eastern Syria against facilities used by groups affiliated with Iran’s Islamic Revolutionary Guards Corps (IRGC),” said Secretary of Defense Lloyd J. Austin III, adding, “The airstrikes were conducted in response to today’s attack as well as a series of recent attacks against Coalition forces in Syria by groups affiliated with the IRGC.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.