A surprise attack by Iran-backed Hamas, a Palestinian militant group, on Israel this past weekend has ignited geopolitical tensions.?The impact of the war is set to be seen across the globe, including India.?
Gold prices have already begun to rise on increased haven demand amid tensions ramping up in the wake of the?Hamas attack on Israel.?The precious metal gained as much as 1.2% today, as financial markets brace for headwinds and volatility from the shock attack by Gaza militants, as per a?Bloomberg report.
Moreover, higher oil prices would increase inflation pressure and further weaken the Rupee, thus making gold an attractive investment option. This could?drive up gold prices?domestically.
Gold rate today, as per a?Mint report, is witnessing strong buying interest due to rising uncertainty after the Israel-Palestine conflict. Gold price today on Multi Commodity Exchange (MCX) opened higher at??57,000 per 10 gm levels and went on to hit an intraday high of??57,400 levels within a few minutes of the commodity market's opening bell today.
As far as oil prices are concerned, they have?surged as much as 5%?after the broadest and bloodiest?attack?on Israel in decades.?Brent crude ¡ª the global oil benchmark ¡ª jumped 4.94% to?$88.76 a barrel?on Monday. This bodes ill for India's state-run oil marketing companies (OMCs) which have been forced to keep the retail fuel prices unchanged ahead of the general elections in 2024.
High crude oil prices will weaken the profitability of the three government-owned oil marketing companies in India ¡ª Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd, according to Moody's.
On Monday,?shares of Indian Oil Corporation, Hindustan Petroleum Corp and Bharat Petroleum Corp are all down?around 2-3%.
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Investors must brace for sharp swings in the equity market this week amid the unexpected escalation of the decades-long conflict between Israel and the Palestinian militant group Hamas, as per ET.
Sensex and Nifty both have begun trading in red today morning, being down nearly 0.5% ?each due to heightened geopolitical tension stemming from Hamas's unexpected attack on Israel.??
"Attack on Israel in the Middle East over the weekend presents a risk for stocks as such events could possibly lead to a surge in oil prices thus putting at risk the recent US disinflation narrative, in our view," as per Nomura India, a Business Today report mentioned.
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According to the Embassy of India in Israel, the trade (excluding defence) between the two countries stood at US$ 10.1 billion in the financial year 2022-23. That fiscal, Indian merchandise exports to Israel were valued at $7.89 billion and Israeli exports to India were $2.13 billion.?
As per Times Now, India's major exports to Israel include automotive diesel, chemical and mineral products, machinery and electrical equipment, plastics, textile and apparel, transport equipment, and agricultural products. India primarily imports defence machinery, petroleum oils, electrical equipment and transport equipment.The bilateral trade could take a hit if the war is prolonged, as Israel's resources would then get concentrated towards conflict response.
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