These Asian markets are most at risk from the Russian invasion of Ukraine

The aftermath of Vladimir Putin’s invasion of Ukraine continues to spill over into other countries.

Oil price hikes in India are “by far the most severe impact in Asia, where most nations will import oil and see their economies suffer,” Real Money columnist Alex Frew McMillan recently noted.

Now the major Sensex index of Indian stocks is closely tied to oil prices for one simple reason.

“India is the third largest oil importer in the world after China and the United States, shipping 86% of the oil it needs.” remarked McMillan. “Every 10% rise in oil prices hurts the Indian economy by -0.20 basis points, calculate Nomura economists Sonal Varma and Aurodeep Nandi.”

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In addition, “a 10% rise in oil prices also causes Indian inflation to rise by 0.40 percentage points,” McMillan said. “That ranks with the Philippines, another major importer of energy and food, with the greatest impact in Asia.”

The impact is also intense for Hong Kong, which is now facing the added strain of a Covid crisis that is rapidly spiraling out of control.

“Hong Kong stocks have historically fallen sharply in response to military conflicts such as the Gulf War, the Iraq War and Russia’s annexation of Crimea,” McMillan noted. “But analysts at CCB International note that the Hang Seng rallied 3% to 11% in the following quarter after fighting began.”

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