Indian Markets Slide as Oil Nears $100 on US-Iran Tensions
Rupee hits 94.95 per dollar; Sensex drops 500 points as Brent crude surges amid Middle East conflict.
KEY POINTS
- Rupee depreciated 21 paise to 94.95/$ on Wednesday
- Sensex fell 500 points to 75,060; Nifty dropped 129 points to 23,506
- Brent crude neared $100/barrel on US-Iran tensions
- FIIs net sold Rs 1,231.9 million on Tuesday
- Gift Nifty indicates flat start Thursday with Brent above $101.50
The Indian rupee weakened 21 paise to 94.95 against the US dollar in early trade on Wednesday, pressured by Brent crude climbing toward $100 a barrel as US-Iran hostilities escalated. A weaker dollar index at 98.76 limited the decline.
Benchmark indices tumbled in tandem. The BSE Sensex fell 500.25 points to 75,060.61 and the NSE Nifty dropped 129.40 points to 23,506.10, extending Tuesday's losses when the Sensex shed 555 points. Information technology stocks led the decline.
“Sustained crude prices around or above USD 100 could intensify inflationary pressures, weigh on the rupee and the current account, squeeze corporate margins and diminish expectations of monetary easing.”
Brent crude futures rose 1.4 percent to $99.30-99.33 per barrel, while WTI traded in the $94-95 range. Analysts warned sustained prices above $100 would intensify inflation, strain the current account, and delay monetary easing.
Foreign institutional investors sold a net Rs 1,231.9 million of equities on Tuesday, adding to selling pressure. Rising US Treasury yields compounded the risk-off mood.
Gift Nifty signaled a flat opening for Thursday, trading at 23,487.5, down 0.01 percent at 8:11 am, with Brent above $101.50 and WTI at $96-97 per barrel.
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