India, March 4 -- The Indian rupee plunged to an all-time low on Wednesday as escalating tensions in the Middle East sent crude oil prices soaring, sparking fears of higher inflation, a widening trade deficit and capital outflows from emerging markets.

The currency weakened past the psychologically important 92-per-dollar mark for the first time, falling as much as 0.8% to 92.30 against the US dollar. The drop eclipsed its previous record low of 91.9875 hit earlier this year.

The sharp decline came as global markets turned risk-averse amid the intensifying conflict involving the United States, Israel and Iran, which has raised fears of disruptions to energy supplies.

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The biggest trigger for t...