Heatwaves, cyclones are impacting Indian, other Asian stock markets

Stock pickers in some of Asia’s key markets are being battered by a series of extreme weather events from heat waves to flooding, signaling the difficulties ahead as El Nino-related risks rise and climate change accelerates.

In resource-rich Australia, Newcrest Mining Ltd.’s Telfer gold mine was closed earlier this month and the company’s shares fell from more than a two-year high after the biggest cyclone to hit the Western Australian coast in almost a decade made landfall. That followed heavy rain and flooding that hampered coal production for miners such as Whitehaven Ltd. and BHP Group late last year.

Further west, India’s hottest February in more than a century, following a spike in cattle deaths caused by a viral skin disease, fueled a rare drop in dairy production in the world’s largest milk-producing nation. With more heat waves forecasts alongside peak summer demand, shares of dairy firms such as Parag Milk Foods Ltd. and Heritage Foods Ltd. are soaring.

Extreme weather has always been part of the cost of doing business, but the frequency of such events is increasing. And while volatility linked to them isn’t limited to Asia, it’s certainly the region where the impact on stock markets has been outsized so far this year. Researchers and analysts who track the impact of these events have a message for traders struggling with stock swings: get used to them.