March 12 (Reuters) - Indian shares declined for a second consecutive session on Thursday, as the raging Middle East war kept investors jittery, while power stocks rose on investor expectations of a demand surge due to an early summer.

The Nifty 50 fell 0.95% to 23,639.15, while the BSE Sensex lost 1.08% to 76,034.42. The indexes have lost 6.1% and 6.5%, respectively, since the U.S.-Israeli war on Iran began on February 28.

Twelve of the 16 major sectors logged losses. The broader small-caps and mid-caps fell 0.7% and 0.4%, respectively. The rupee dropped to record low of 92.3575 per dollar.

Oil prices traded around $96.5 a barrel on Thursday as Iran stepped up attacks on oil and transport facilities across the Middle East, raising fears of a prolonged conflict and oil-flow disruptions through the Strait of Hormuz.

Higher oil prices are detrimental for India, which is the world's third-biggest crude importer, as it could lead to higher fiscal deficit, inflation and hit growth.

Meanwhile, U.S. on Wednesday said it was launching trade investigations into excess industrial capacity in 16 major trading partners, including India, rebuilding tariff pressure after the Supreme Court tore down much of President Donald Trump's tariff program last month.

"US tariffs are not a major concern as they will likely look to restore Trump's previous tariff levels. But the Middle East conflict will continue to fuel volatility in the market," said Pankaj Pandey, head of retail research at ICICI Securities.

Auto stocks slid 3.2% to a near seven-month low, leading sectoral losses, as spike in oil prices and disruption in liquefied natural gas (LNG) supply due to Mideast conflict led to risk aversion.

Heavyweight financials and private banks lost 1% and 1.6%, respectively.

Energy stocks bucked the trend and rose 1.9% on the back of early summer onset and expectations of surge in demand for alternative feedstock due to Mideast conflict.

Coal India jumped 5.2%, while NTPC and Power Grid Corp rose 2.8% and 1.6%. They were the top three gainers among Nifty 50 stocks.

(Reporting by Kashish Tandon in Bengaluru and Bharath Rajeswaran and Vivek Kumar M in Mumbai; Editing by Sumana Nandy and Sherry Jacob-Phillips)

By Bharath Rajeswaran and Vivek Kumar M