New Delhi, March 18 -- Escalating tensions in West Asia have stalled the powerful rally in India's public sector stocks, erasing about Rs.6 trillion in market value and triggering a broad-based correction after a multi-year surge.

Since 27 February, when the conflict in the region intensified, the Nifty 50 has dropped about 8% as crude oil prices climbed past $100 a barrel, fuelling global risk aversion.

The BSE PSU index, which hit its 52-week high of 22,560.74 on 26 February, has declined nearly 8% since then. Even so, the 60-stock index has held up slightly better than the broader market this year, rising about 1.5% year-to-date while the Nifty 50 is down roughly 10% over the same period.

The shift in sentiment is reflected in marke...