2 min readMar 3, 2026 06:01 AM IST First published on: Mar 3, 2026 at 06:01 AM ISTThe conflict in West Asia has rattled stock markets across the world. On Monday, major Asian markets ended the day in the red. The Nikkei 225 fell by 1.35 per cent, Kospi by 1 per cent and Hang Seng by 2.14 per cent. Indian markets also felt the pain — the BSE Sensex was down 1,048 points or 1.29 per cent at the close. The India VIX, a volatility index, surged 25 per cent as uncertainty rose over the conflict. The FTSE 100 was also down during early trading. With risk aversion setting in, demand for safe haven assets such as gold has surged.Escalation of the conflict to the wider region has pushed up oil prices — Brent crude oil was up more than 6 per cent — as investors grapple with the implications of the closure of the Strait of Hormuz, through which a significant share of the world’s oil and gas flows. On Sunday, the OPEC+ agreed to increase oil output by 2,06,000 barrels per day. But on Monday, Saudi Aramco’s Ras Tanura was reportedly shut down temporarily. Disruptions in supplies will push up oil prices. Some analysts predict that oil prices could touch $100 per barrel if supply disruptions worsen. For India, which imports a substantial share of its oil needs, higher crude oil prices, sustained over a period, could have implications for inflation and the twin deficits. The Gulf is also home to a large Indian diaspora. Disruptions to its economies could have consequences for remittance flows to India.AdvertisementIndian markets, under pressure for some time, face a challenging moment. Since the beginning of this year, the Sensex is down almost 6 per cent. Foreign portfolio investors have taken out around $2 billion in 2026 so far, after outflows of $18.9 billion last year. Considering that a sizeable section of society is now invested in the markets — as of October 2025, there were more than 21 crore demat accounts along with a significant number of mutual fund investors — the pain will be widely felt.