New Delhi, March 18 -- The West Asia conflict has roiled oil and equities worldwide. But a new threat is emerging: stress in the US private credit market. If this pain deepens, market veterans say, the stress could flood into already-battered global stocks, triggering a larger pullback from an emerging market (EM) like India.

The US private credit market is facing its first big test after a decade-long boom, as institutions ranging from Morgan Stanley to JPMorgan Chase and BlackRock to Blue Owl restrict redemptions or mark down fund values. Many investors are wondering whether borrowers can repay comfortably amid higher rates and disruption from artificial intelligence.

Apart from war, other risks to global equity markets include high i...