This week, the Indian markets saw significant bleeding and weeping as the Nifty 50 was down almost 3%, and there seem to be 3 noteworthy culprits for this whole thing:
Should You Be Worried?
Although the Iran-Israel conflict caused a dent in the markets out of fear, the effect on the nation might be minimal. Unlike the Russia-Ukraine War (markets fell 5% in a single day), where India relies on them for oil and crops, neither Iran nor Israel contributes significantly to the Indian economy.
Concerning the expected sustenance of inflation levels and subsequent delay in rate cuts, whether it is the USA due to the retail numbers or India due to the crude oil rally, one can only wait to see how the situation plays out.
Bottom Line - Caution is advised as we see the General Elections add on to the already heightened volatility. However, if you keep your vision intact on the long term Indian growth story, these short lived aberrations shouldn’t worry you.