Does the Iran – Israel Conflict Spell The End Of Rally In Equity Markets? NIFTY-50 Crash

DOES THE IRAN – ISRAEL CONFLICT SPELL THE END OF RALLY IN EQUITY MARKETS?

Equity markets around the world have pulled back sharply since tensions in the Middle-east started to escalate after Israel assassinated Hassan Nasrallah, the dreaded leader of Iran-backed terrorist group Hezbollah on 27-Sept-2024, and Iran retaliating with missile strikes on Israel on the night of 1-Oct-24. The NIFTY-50 Index in India, after hitting an all-time high on 26-Sept-24, has so far corrected by almost 5% over the last one week.

Does this pull-back in equity markets mark the end of the strong bull-run that has been at play for a while now? Or is this something that is likely to resolve itself within a few days and weeks, post which equity markets are likely to resume their march to new highs? The answer potentially lies in another geopolitical upheaval that started two years back – the Russia – Ukraine War! The two conflicts have striking similarities in terms of potential impact on equity and asset markets. To begin with, both conflicts have had or is having an outsized impact on global energy prices. And to that extent, it could be instructive to look at the impact the Russia – Ukraine War had on equity markets, if one has to gauge the potential impact of latest bout of escalation in tensions in the Middle East on equity markets. Turns out that the NIFTY corrected by almost 5% on the day the Russian invasion of Ukraine started on 24-Feb-22. The NIFTY continued to slide for four more months and eventually made a bottom in Jun-22. But by then, the NIFTY had corrected by over 10% since the start of the invasion. While history doesn’t necessarily repeat, it surely does rhyme. And to that extent, the 10% slide in equity markets in the aftermath of the start of hostilities between Russia and Ukraine can surely serve as an useful reference, when it comes to gauging the potential impact of on-going tensions in the Middle East on equity markets.

More importantly, once the dust settles on this conflict, it would very likely become apparent that the key factors that typically drive an equity market rally during the course of a rate-cut cycle are very much intact, and that in turn could well take us back to a raging-bull environment by as soon as Christmas of 2024. In fact, equity markets, by then would have the added advantage of clarity about the outcome of US elections and the policy priorities of the presumptive winner – something that can only add to the overall bullish sentiment.

However, none of this means that we are will be out of the woods soon and that a bull-run in equity markets can persist for a long time to come. In fact, the possibility of the US economy eventually slipping into a recession, and in turn triggering a large stock market correction continues to grow with every passing week and month. And hence, the risk of very high volatility in equity markets continues to persist, even if the on-going tensions in the Middle East get resolved soon.

And that is why, there has never been a time when a time-tested and analytically rigorous rules based approach was more critical, because only a rules-based approach can help navigate the on-going and upcoming turbulence in equity markets without getting caught up in the clutter and noise generated by day-to-day news-flows and day-to-day wild swings in markets. And this is precisely what we try to bring to table for our clients through our proprietary AlphaSIP Strategy®

Please watch our earlier video titled – “40%+ per annum in Bull Market, FD+ Return even in a Crash (Part 4)” to understand the underlying logic of the AlphaSIP Strategy®

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Chapters:
00:00 Teaser
00:39 Vote of thanks
01:18 Introduction to tensions in the Middle-east and its impact on NIFTY
02:30 Recap of market outlook presented in last video
03:11 Conditions required for a sizeable market correction to materialise
04:46 Impact of Russia - Ukraine war on NIFTY
05:26 Similarities between Russia-Ukraine conflict and Iran-Israel conflict
06:50 Potential impact of on-going tensions in Middle-east on NIFTY
10:01 Opportunity on other side of a US recession
14:58 Introduction to AlphaSIP Strategy®
18:51 How to sign-up for AlphaSIP Strategy®
20:05 Terms & Conditions for investing in AlpahSIP Strategy®
20:29 Minimum investment amount
21:48 Lock-in period

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[IndraanilGuha]

Equity markets around the world have pulled back sharply since tensions in the Middle-east started to escalate after Israel assassinated Hassan Nasrallah, the dreaded leader of Iran-backed terrorist group Hezbollah on 27-Sept-2024, and Iran retaliating with missile strikes on Israel on the night of 1-Oct-24. The NIFTY-50 Index in India, after hitting an all-time high on 26-Sept-24, has so far corrected by almost 5% over the last one week.

Does this pull-back in equity markets mark the end of the strong bull-run that has been at play for a while now? Or is this something that is likely to resolve itself within a few days and weeks, post which equity markets are likely to resume their march to new highs?

Watch this video till the end to know more!

[abhinavzone]

You missed the impact of China’s stimulus package, which has led to significant foreign institutional investor (FII) outflows from India to China. I believe this is one of the primary factors contributing to the recent selloff in the Indian market

[aDroid_]

Thanks for valuable info in critical times 🙏

[rdeeep]

Fantastic I was expecting a video on the current dip, and there you are. In fact I was going to put a comment on your previous video asking for a video on the current dip, but as expected u have come up with a fantastic video on the weekend. I completely agree on your views and explanation. Thank you very much and keep guiding with your timely videos on market view

[karthikn]

Very much informative and educative for each and every Serious Investors like me.

[nakul]

Respect for your approach, but a few problems:
2.5L is taxfree in Ulips. You recommended ulips as switching is free. Now, with 5L p.a., everything is subject to LTCG. How is that going to work??
Suggestion: That's the problem with taking agency of one LI company. With potential like yours, you should become a corporate agent or broker. There are plenty of 0 cost ulips which allow you to invest 2.5L
Till you sort this...

[SUDIPTOSHAW-ujgt]

Contents in your video are so rich in knowledge, being so logical & thought provoking that at the end, it's like ohhh the video ended so quickly! You are one among millions in you tube who really impart the pros and cons of financial market in the most simplified views & solutions. Best video in current middle east crisis!.

[gangadharkamath]

Thank you Sir for a perfect, sincere and knowledgeable presentation

[gauravpuri]

Outstanding content - you are among the most remarkable speakers I have encountered in a considerable time.

[sumanication]

I am amused by the clock just skipping hours within seconds. 😂

Good video by the way!

[vipuljasani]

You were absolutely right in predictions

[rameshkulkarni]

Always appreciate your content!! One thing is notclear in this is current crash Nifty would go another 5-7% from here on or soon it will bounce towards all time high? Appreciate your response. Regards....

[ajayjain]

Sir u deserve million views…amazing insight as always…

[ritesh]

please keep showing ur guidance for when the recession about to star and end

[ritesh]

very insightfull video sirji ...Thanku for guiding us..with ur knowledge. showing us light in this dark time of market

[JackMa-ze]

Please explain what is Reverse Repo and what is meant by balance in reverse repo.

[shshfb]

With all due respect sir, You have not mentioned the move of Nifty 50 from Top of May 2006 to the top of Jan 2008.Which is exact replica of the move of Nifty 50 from top of Jan 2020 to the Top of Sep 2024.
If the markets are fractal in nature and Markets are manipulative in nature don't you think you should also consider how the Insiders go through the phases of distribution in the last leg of bubble phase (May 2006-Jan 2008) which has been already completed on the top of 27th Sep 2024?

[debashisguha]

Your suggestions are based on historical data and definitely have some logic. But the present market is unpredictable specially because so many events are taking place at a time. Let us see....

[iray]

you are so genuine and so knowledgeable
we are able to invest in markets only because you are giving us visionary guidance and detailed support

[apuravjain]

Thank you for uploading the video. Very insightful.

A request from last video as well. Would it be possible for you to recommend how a relatively novice investor can learn about the market. Books, lectures, courses.