Middle East conflict impacts Asian stock markets, Indian stock index erases all gains after US-India trade agreement

1. On Monday, the Indian stock market plummeted, with the NIFTY index dropping as much as 2.1%, marking the largest single-day decline in over a month and completely erasing the gains recorded after the US-India trade agreement in February. Engineering giant Larsen & Toubro, Reliance Industries, and airline InterGlobe Aviation led the decline, as investor sentiment was severely hit by the escalating Middle East conflict.2. JM Financial strategists pointed out that the escalating situation in the Middle East is bringing increasing oil risks to the Indian market. Sectors such as oil sales, paints, aviation, and chemicals may face margin pressure due to rising input costs. Most of India's energy demand relies on imports, and rising oil prices will significantly widen the trade deficit, putting pressure on the rupee and the stock market.3. For every $1 increase in crude oil prices, India's annual import costs rise by about $2 billion. With tensions in the Strait of Hormuz causing oil prices to soar, the Indian economy is facing the dual challenges of imported inflation and external imbalances.