Indian Stocks Erase US Trade Deal Gains on Middle East Conflict

Indian equities tumbled on Monday, tracking declines across most Asian peers, as escalating conflict in the Middle East dented investor sentiment.Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Indian equities tumbled on Monday, tracking declines across most Asian peers, as escalating conflict in the Middle East dented investor sentiment.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.The NSE Nifty 50 Index slipped as much as 2.1% — the most in more than a month — erasing gains made after the country’s trade deal with the US in February. Engineering major Larsen & Toubro Ltd., Reliance Industries Ltd. and carrier InterGlobe Aviation Ltd. led the losses in the benchmark gauge.“Middle east escalation draws rising oil risk for Indian markets,” JM Financial Ltd. strategists including Venkatesh Balasubramaniam wrote in a note, citing likely pressure on shares of oil marketing companies, paints, aviation and chemicals as they may face margin pressure from higher input costs. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Given India’s dependence on imports for most of its energy needs, rising oil prices can significantly widen the trade deficit and weigh on the rupee and equities. A $1 increase in crude prices raises India’s annual import bill by about $2 billion, putting pressure on the trade balance, the JM Financial strategists said.The Middle East conflict is the latest setback for India’s $5.1 trillion equity market, which has lagged most major peers since late 2024, partly due to weaker earnings growth. Lower exposure to artificial intelligence-related stocks, compared with markets such as China, South Korea and Taiwan, also contributed to the underperformance.While local stocks saw some gains following India’s much-awaited trade agreement with the US on Feb. 2, a relentless selloff in information technology shares has continued to weigh on investor sentiment.“Impact on India is typically magnified as higher crude oil prices widen the current account deficit, stoke domestic inflation, pressure the rupee,” said Nachiketa Sawrikar, a fund Manager with Artha Bharat Global Multiplier Fund. This could also lead to foreign outflows as “global investors reduce risk exposure.”Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.365 Bloor Street East, Toronto, Ontario, M4W 3L4© 2026 Financial Post, a division of Postmedia Network Inc. All rights reserved. Unauthorized distribution, transmission or republication strictly prohibited.This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.You can manage saved articles in your account.and save up to 100 articles!You can manage your saved articles in your account and clicking the X located at the bottom right of the article.