North India Statesman
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News India Live, Digital Desk: Indian market: The Indian market is currently facing a dual challenge. On the one hand, there is pressure on heavy insurance claims associated with the 2010 Mangaluru plane crash, which is putting financial burden on insurance companies. At the same time, the second and biggest and immediate challenge is the growing geopolitical tension between Israel and Iran, which has caused turmoil in the global economy as well as the Indian market.
First shock: Economic burden of aircraft accident
After the Mangaluru plane crash of Air India Express in 2010 (in which 158 people lost their lives), insurance companies had to pay a huge compensation of Rs 2,490 crore. This was the biggest insurance claim in India’s aviation history, which put great financial pressure on the insurance sector. This is an old phenomenon, but its financial impact is still under discussion as it paid a large amount and became a lesson for insurance companies.
Second and big shock: the shadow of Israel-Iran war
But what is more worrying is the growing military conflict between Israel and Iran. The direct impact of this tension is visible on global markets, and the Indian market is also not untouched by this:
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Crude oil prices: Global prices of crude oil have increased rapidly due to increasing tension in the Middle East. India imports its needs most of its needs, so the expensive crude oil directly increases inflation for us. Increasing fuel prices increases freight and production costs, which eventually falls on the common man.
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Gold prices: Gold is always considered a safe investment in a period of geopolitical uncertainty. Therefore, when an atmosphere of war is created, investors withdraw money from shares and other risky options, which makes his prices touch the sky.
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Stock market fall: Investors get nervous in an atmosphere of war and uncertainty. Foreign investors have started withdrawing money even in the Indian stock market, which is seeing a huge decline and ups and downs in the market.
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Weakness of rupee: Indian rupee is also getting weak against the dollar. Weak rupee makes imports more expensive, which may further increase inflation.
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Effect on supply chain: The Middle East is an important shipping route. If the conflict increases, the global supply chain may be interrupted, which may also have a negative impact on the availability of products and prices.
Overall, there is an atmosphere of uncertainty in the Indian market due to these global and domestic challenges. The common man needs to be cautious on the growing inflation and investment front.
