By Linus Garg
First publised on 2023-10-27 08:44:43
26th October, stock markets, which were on slippery ground for the
last five trading sessions, saw huge selling by foreign funds due to the worsening
war situation in the Middle-East. The Sensex crashed by 901 points on the day,
taking the total losses to nearly 3300 points in just six trading sessions. Investors
have lost a combined Rs 17.8 lakh crore in these six sessions. Along with the
scare generated by the war-like situation in Gaza, foreign funds are also
withdrawing funds as the yield on government bonds in the US is rising.
given Israel's record of responding promptly and harshly to any security
threats, the markets had discounted the situation there and thought that the
matter will end with a retaliatory strike by Israel. But with hostages in
captivity, Hamas has an upper hand as of now and it seems that the situation
will remain tense for a longer period. That is likely to affect economies
around the world as supply chains will be disturbed and demand will go down.
not been any fundamental change in the attractiveness of Indian stocks in the
last 15 days. The markets were rising even after the Hamas attack. But it seems
that foreign funds have now accounted for a long-drawn affair in Gaza that will
lead to uncertainty. Still it is dismaying that foreign funds are withdrawing funds
from India, a country that is not likely to be majorly disturbed by the
conflict. Hence, the crash in the market is an opportunity for the shrewd
investor to pick up selected and fundamentally-strong shares at a discount. For
those who had invested when the markets were rising, this is not the time to
sell. They must hold and wait for the situation to improve.