Stock market braces for impact from Gulf war
View(s):The conflict in the Gulf will impact fuel prices, exports, and foreign exchange, with the Sri Lankan stock market feeling the brunt if the conflict escalates, analysts say.
Analysts pointed out that it all depends on whether the war will escalate and how it will pan out. One analyst pointed out that as of now, it is an air war. They noted that the US involvement in the war will determine the economic impacts. “The US is a wild card,” he said.
Stock market investors will likely be on the sidelines, and capital investments will be very slow, analysts noted.
Stockbrokers pointed out that when currencies take a hit, the international sovereign bond repayment that Sri Lanka has to face in three years will also be an issue. “If the war escalates, our reserves will have almost dried up, and inflation will be quite high. It is important to watch out for the science,” one stockbroker said. The Colombo bourse has been on a downward trend this week.
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