Russia-Ukraine Conflict: Market expert Ajay Bagga elaborates on the whole issue, explaining how this geopolitical tension is a short-term problem for the Indian market and a major threat to the Fed.
When the tension subsides …
Ajay Bogga says if Russia-Ukraine tensions end and some agreement is reached, there will be a lot of strong risks in the market. The ongoing geopolitical concessions in the market will be lifted. Commodity prices will also go down. He said Russia was the third largest oil producer in the world. It is also a major gas producer. Europe is more dependent on Russia. More than 40 percent of Europe’s gas comes from Russia. Europe gets more than 20 percent of its oil from Russia. Russia also produces 10 percent copper and 10 percent aluminum worldwide. Recall that in 2018, the Russian aluminum company was banned for a few days, after which the aluminum market fled. America had to lift the embargo. Russia’s aluminum and copper markets are huge. Products above all, the market down. The Russian market has also fallen. Oil prices are rising. All of this will have an effect. Danger can be avoided with some agreement.
What will happen to India if Russia invades Ukraine?
– Zee Business (ZeeBusiness) February 14, 2022
If attacked …
Ajay Bagga says that if there is an attack, then Russia is not such a big market or economy. Ukraine is not equal. Ukraine’s GDP is বিল 180 billion. It has no market share in the global index. Russia also has a little over 1 percent. In such a situation some companies will suffer in a short time. The German market will be affected. Eastern European markets will be affected. We saw it in 2014, saw it in 2009 and 2004 too. When Georgia or Crimea was invaded. It is short-lived. It is digested very quickly.
Bagga said the problem this time is higher inflation. As oil, aluminum and copper prices rise, inflation will rise further. The risk is that America has broadcast more this time. To avoid domestic pressure, Putin and Biden are serious about not over-evaluating here, so that nothing goes wrong. Nothing else is going to happen. More pasteurizing is happening on both sides.
Money for the Indian market
Ajay Bagga says the Fed’s rate hike will be a big problem for the Indian market. Which has already got a discount in the market. The issue of Russia is not so big for us. It does not have much impact on our market. Some companies export more to Russia. They will suffer in the short term. Ukraine does not have much influence in the world economy. Don’t worry about it. Foreign investors (FIIs) will raise money and they are still withdrawing. Domestic investors are buying. Because of this, there is no fuss, but the risk of Fed is high.
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