New Delhi, March 13 -- Escalating tensions in the Middle East are beginning to ripple across global financial markets, leaving bond investors facing renewed uncertainty. The ongoing conflict involving the United States, Israel and Iran has pushed crude oil prices above $100 per barrel, triggering concerns about inflation and prompting sharp movements in global bond yields.

For investors in Indian debt markets, the situation has become particularly sensitive. Rising oil prices tend to weaken emerging market currencies and increase inflation risks, both of which can weigh on government bond prices.

Indian government bonds rose on Friday, extending gains, as geopolitical tensions kept energy prices elevated and pressured the rupee. The ben...