Global Markets Shaken As West Asia Conflict Widens

By Shubhangi Bhatia

A sharp escalation in West Asia has triggered a global economic shockwave, sending airline stocks into a tailspin and oil prices surging.

Following joint US-Israeli strikes on Iran, the conflict continued to thump across the region on Monday, as Islamic Republic launched retaliatory drone and missile attacks across the Gulf, impacting major hubs like Dubai and triggering interceptions over Bahrain and Qatar.

With US President Donald Trump warning the campaign could last weeks and Iran ruling out negotiations, the region is braced for a prolonged conflict.

Aviation and Energy in Turmoil

Global aviation is facing a massive disruption as carriers across the Persian Gulf extend blanket flight suspensions. World’s largest international airline, Emirates, has halted all operations to and from Dubai until Tuesday afternoon, while Etihad and Qatar Airways have extended cancellations due to airspace closures.

The ripple effects have hit Europe and Asia. European airline giants like Lufthansa and IAG saw shares plummet by up to 13%. Indian airlines have taken a combined hit of up to Rs 220 crore in just 48 hours.

The crisis is dealing a double blow to the industry: oil prices surged over 8% on Monday, with Brent crude briefly topping $82 per barrel. Traffic through the Strait of Hormuz, the region which is a vital supply route for global energy, dropped by about 70%.

Saudi Arabia was forced to shut its largest domestic refinery following a drone strike, while Qatar has suspended liquefied natural gas output.

India Braces For Trade Disruptions

On Monday, the Department of Commerce held inter-ministerial deliberations with exporters and logistics players to assess the impact on India's export-import (EXIM) cargo flows. The government is monitoring critical variables, including:

Routing and Transit Times: Adjustments to bypass conflict zones.

Costs: Trends in freight and insurance premiums.

Supply Chain Resilience: Ensuring MSME exporters are protected and essential imports for domestic production remain unaffected.

A Global Security Crisis

The conflict also reached the fringes of Europe, with drone strikes targeting a British air base in Cyprus. While damage was limited, the incident marks a dangerous geographic expansion of the war. Meanwhile, Israel has expanded attacks into Beirut following fire from Hezbollah, and Kuwait ‘mistakenly’ shot down 3 US fighter jets.

Investors have fled to safe-haven assets, driving gold prices up more than 2% to $5,389 an ounce.

Additionally, the US State Department issued an advisory, urging all its citizens to exercise increased caution due to potential security risks.

Gridlock On The Green Path: Transmission Delays Trigger Massive Power Waste

By Amritha Pillay

What? 

India may be trying to achieve ambitious renewable energy targets, but the infrastructure to carry that power is still struggling to keep pace. After a decade where Rajasthan and Gujarat emerged as the nation's solar powerhouses, the industry is now grappling with the technical reality of curtailment, or the forced idling of power plants.

In the renewable energy sector, curtailment refers to the deliberate reduction in output from power plants, either to maintain grid stability or because the transmission lines are simply fewer to carry the volume of electricity being generated.

Why?

Industry associations report that the average curtailment across major renewable energy (RE) states such as Rajasthan, Gujarat, and Karnataka has hovered between 15 and 20% over the last year. In some cases, mid-day peak-hour curtailment reached 100% until January 2026.

The crisis is primarily driven by corridor congestion. While India has surpassed 200 GW of RE capacity (excluding Hydro power), with Rajasthan and Gujarat accounting for more than 40 GW each, the physical transmission lines needed to evacuate this power remain stuck in development.

India’s green energy additions have been galloping. A recent SBI Caps report on the power sector highlighted that 40 GW of solar capacity is estimated for addition in 2025. However, transmission infrastructure additions lagged nearly 50% behind their targets as of late FY26.

Transmission infrastructure addition has been slow because of a plethora of issues — right of way, land acquisition, equipment shortage and idle transmission capacity reserved for stranded plants.

Why It Matters 

The inability to move power is not just a technical glitch; it is an economic drain. Ravi Verma, a member of the Governing Council of the Sustainable Projects Developers Association (SPDA), estimates that ongoing congestion erodes approximately Rs 0.25 to Rs 0.30 per kWh from project tariffs.

“For large RE zones in Rajasthan, evacuation delays of 15–24 months have materially impacted project cash flows, significantly affecting developer returns and bankability,” he said.

S&P Global Energy warned in January that after years of rapid growth, these widespread restrictions are beginning to limit future solar expansion.

Publicly traded solar energy firms are now reporting these losses to shareholders. Acme Solar recently disclosed a one-time loss of approximately Rs 17.5 crore at its 300 MW Sikar project due to restricted grid access.

In some cases, depending on how the lapse occurred, the government may compensate for it.

While augmenting transmission infrastructure is a multi-year effort, almost every stakeholder in the power sector is hopeful that energy storage systems will help store what the grid cannot evacuate at a particular hour.

The Year-End Moves No One’s Watching

Markets don’t wait — and year-end waits even less.

In the final stretch, money rotates, funds window-dress, tax-loss selling meets bottom-fishing, and “Santa Rally” chatter turns into real tape. Most people notice after the move.

Elite Trade Club is your morning shortcut: a curated selection of the setups that still matter this year — the headlines that move stocks, catalysts on deck, and where smart money is positioning before New Year’s. One read. Five minutes. Actionable clarity.

If you want to start 2026 from a stronger spot, finish 2025 prepared. Join 200K+ traders who open our premarket briefing, place their plan, and let the open come to them.

Get Year-End Briefing

_{By joining, you’ll receive Elite Trade Club emails and select partner insights. See Privacy Policy.}

56.9

That’s India’s Manufacturing PMI for February — the fastest expansion in four months, signalling solid factory momentum. According to HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, the index rose from 55.4 in January, comfortably above the 50-mark that separates growth from contraction, though slightly below the flash estimate of 57.5.

Overview: Strong domestic demand powered new orders and lifted output to a four-month high, reinforcing expectations of economic resilience after 7.8% GDP growth in the December quarter. Input cost pressures stayed moderate, while firms raised selling prices at the quickest pace in four months.

Setting: Export growth cooled to a 17-month low, reflecting lingering tariff uncertainty. Employment ticked up only marginally, with just 4% of firms hiring, even as business confidence improved.

The Pioneer presents India Finance & Innovation Forum 2026 convenes policymakers, regulators, financial institutions and industry leaders to examine India’s evolving financial architecture. Over three days, senior decision-makers will explore fiscal and monetary priorities, capital markets, digital finance and innovation-led growth through focused dialogue, networking and collaborative sessions on what’s changing, what works and what comes next.

Trade Gap Bites

India’s current account deficit (CAD) widened to $13.2 billion in the third quarter of FY26, or about 1.3% of GDP, according to data released by the Reserve Bank of India. The deficit rose from $11.3 billion, or 1.1% of GDP, a year earlier.

Pivot: Imports outpaced exports during the quarter, widening the goods trade deficit. Services exports and remittances offered support, but they did not fully offset the shortfall.

What This Means Going Forward: Although the gap remains moderate by historical standards, the increase signals renewed pressure on India’s external balance amid uncertain global trade conditions and volatile energy markets.

India Widens Trade Chessboard

India and Canada agreed on the terms of reference for a Comprehensive Economic Partnership, formally launching negotiations toward a free trade agreement they aim to conclude by the end of 2026.

Backdrop: Prime Minister Narendra Modi said the pact could lift bilateral trade from roughly $9 billion to $50 billion by 2030, signalling a strategic reset after diplomatic tensions between the two countries last year. Canadian Prime Minister Mark Carney and Modi also signed a long-term uranium supply agreement to support India’s nuclear energy expansion.

Fast Facts: In recent months, New Delhi has accelerated its trade push. It concluded a landmark agreement with the European Union, finalised a deal with the United Kingdom, and signed trade pacts with Oman and the United Arab Emirates, while reopening talks with the Gulf Cooperation Council.

Tata Steel’s Green Push

Tata Steel will invest Rs 11,000 crore in Jharkhand to develop advanced-grade, low-carbon steel at its Jamshedpur facility, Tata Group Chairman N. Chandrasekaran announced, Business Standard reported.

Lead: Speaking alongside Tata Steel CEO T. V. Narendran and Chief Minister Hemant Soren, Chandrasekaran said the investment will focus on advanced green steel technology pioneered by the group, aimed at reducing carbon emissions in production. He added that the technology could also benefit other steelmakers over time.

What’s Next? Separately, Tata Motors plans to invest in hydrogen-powered trucks at the same location, a move Chandrasekaran described as strategically significant for both domestic and global markets. The Tata Group will also set up an expert panel to explore further investment opportunities across sectors in Jharkhand, following suggestions from the chief minister.

Markets Take A Beating On War Tensions

On Episode 812 of The Core Report, financial journalist Govindraj Ethiraj talks to Shajikumar Devakar, Co-Founder & CEO at Neo Wealth Management, as well as Ajay Kedia, Director at Kedia Advisory.

• Markets take a beating on war tensions but seem to have avoided the worst, for now

• Indian carriers are second most affected even as thousands of passengers continue to be stranded in West Asia

• What are ultra high networth investors doing at a time like this?

• Prices of commodities including oil spike, where could they go next