Brent crude oil prices approached the $99 per barrel threshold on Thursday, driven by escalating military activity in the Middle East.
The surge in energy costs has intensified pressure on global markets, with Indian equity benchmarks extending their losing streak for a fourth consecutive session.
The Sensex fell 364 points, or 0.47%, to close at 76,391.39, while the Nifty 50 dropped 127 points, or 0.53%, to finish at 23,869.60.
The persistent decline reflects growing investor anxiety over supply disruption risks and the potential for further inflationary pressure from higher fuel costs.
Market participants are closely monitoring the trajectory of oil prices, which have become the primary driver of sentiment in emerging markets.
This development marks a continuation of the volatility seen earlier in the week.