New Delhi, March 1 -- Conventional wisdom predicts a market crash when war breaks out in West Asia. However, some of India's market experts expect stocks to actually rise this week, even as foreign investors remain cautious amid a market decline.

Behind the contrarian optimism lies Saturday's assassination of Iran's supreme leader Ayatollah Ali Khamenei, which has raised hopes of a speedy end to the conflict, regime change in Teheran, peace in the region and the stability that markets crave. Iran's state media confirmed that Khamenei died on the first day of military assault by the US and Israel.

"Markets could actually rally on hopes of stability in the region in the days ahead after the confirmed death of the supreme leader," said Nir...