The Indian rupee has fallen to its weakest level in a month, while local stocks slumped on Monday, as the Iran war hurt risk assets and lifted oil prices.
The rupee fell 0.3% to 91.2350, its weakest level since early February, while benchmark stock indexes Nifty 50 and BSE Sensex were down about 1% each.
The US and Israel launched strikes on Iran over the weekend, resulting in the death of Iran's Supreme Leader and sparking a wave of retaliation across the region.
Asian equities and currencies fell in response as investors sought safe havens, assessing how a rise in oil prices could impact economies in the region.
Brent crude oil futures were last up nearly 6% on the day, after touching a peak of $82 per barrel in earlier trade.
Analysts warn that a prolonged conflict in the region could create macro-economic spillovers across the globe, given that the Middle East region caters to a little over half of India's crude oil supplies.
Indian government bonds were under pressure on Monday, with the yield on the 10-year benchmark note up 3 bps at 6.6901%.
Two traders at Mumbai-based banks said that price action indicated the Reserve Bank of India was likely active in the non-deliverable forwards market while foreign banks were spotted offering spot dollars, offering some support to the rupee.
