Indian Stock Market Declines Amid West Asia Conflict and Rising Oil Prices

The Indian stock market has seen a notable decline as tensions in West Asia escalate, leading to rising oil prices. The benchmark Sensex and Nifty indices have both dropped significantly, while the rupee has hit a record low against the US dollar. With the conflict intensifying, concerns about oil supply disruptions are growing. This article delves into the current market situation and the implications of the ongoing geopolitical issues. Discover how these developments are affecting the Indian economy and what it means for investors.

By Narendra Chaudhary Mar 13, 2026, 12:29 IST

Market Overview

The Indian stock market experienced a significant drop on Friday, driven by worries related to the ongoing conflict in West Asia and escalating oil prices.

During early trading, the benchmark Sensex index saw a decline of nearly 1%, reaching 75,364 by 11:45 AM.

Meanwhile, the Nifty index fell by 1.1%, settling at 23,401 points.

The downturn in stock markets began on March 2, coinciding with the onset of the conflict.

Additionally, the India VIX index, which gauges market volatility, surged by 0.85% early on Friday.

As the conflict in West Asia approaches its third week, major Asian stock indices also reported losses. The Hang Seng index in Hong Kong closed down by 0.7%, Japan's Nikkei dropped by 1.29%, and South Korea's Kospi fell by 1.8%.

Rupee Hits New Low

Rupee Hits Record Low in Early Trade

On Friday, the Indian rupee further weakened, dropping by 12 paise to a record low of 92.37 against the US dollar during early trading. This surpassed the previous low of 92.35 recorded on Thursday.

After a slight recovery, the rupee ended Thursday's session at 92.18.

On Wednesday, it had closed at 92.04 against the dollar.

This decline coincided with Brent crude oil prices rising above the $100-per-barrel threshold once again on Friday.

Since the joint military actions by Israel and the United States against Iran began on February 28, oil prices have surged nearly 40%. Iran has retaliated by targeting US military bases and cities in the region.

Prior to the conflict, Brent crude was priced at approximately $72.8 per barrel on February 27.

The ongoing tensions have sparked concerns about potential disruptions to oil shipments through the Strait of Hormuz, a crucial maritime route that facilitates about 20% of the world's petroleum supply.

Earlier in the week, oil prices had briefly surpassed the $100-per-barrel mark, the highest level since July 2022.