Middle East War: Markets Hold Nerve, But Oil & Inflation Risks Loom for India

• Despite Middle East war risks, global markets, including MSCI India, show resilience, with historical data suggesting positive returns for Sensex post-conflict.
• Analysts note that the peak of conflict can offer an opportunity to increase equity exposure, but warn of adverse impacts on the Indian exchange rate.
• The speed of market stabilization hinges on the duration of the conflict and its impact on oil supply, with fears of oil reaching $200 a barrel.
• A prolonged war could significantly affect India's inflation, current account deficit, and IT sector, with Goldman Sachs predicting a 2% earnings hit for every 20% rise in Brent Crude.
• Israel's market surprisingly thrives, reflecting investor belief that the conflict could resolve long-term threats, while uncertainty surrounds the Iranian regime's future.