A deepening geopolitical conflict in the Middle East is forcing markets to confront a far more structural shock than recent crises. Host and ET markets editor Nishanth Vasudevan talks to Bhanu Baweja, Chief Strategist at UBS Investment Bank who warns that investors may be underestimating the scale of disruption, particularly in oil, where potential supply losses dwarf the Russia-Ukraine impact. While markets remain anchored to a “short shock” playbook, the risk of prolonged volatility looms large. More critically, he flags a cascading threat where an oil shock morphs into a liquidity crunch and eventually disrupts AI-driven growth. For India, the real vulnerability lies not in foreign flows, but in the resilience of domestic investors.

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Markets May Be Misreading This War: UBS’ Chief Strategist