Indian shares dip, rupee slips to record low on elevated oil prices

Indian shares fell, and the rupee hit an all-time low on Tuesday, as high crude oil prices linked to the Middle East conflict weighed on risk sentiment.

The Nifty 50 declined 0.36% to 24,032.80 and the BSE Sensex shed 0.33% to 77,017.79.

The rupee slid to 95.4325 per U.S. dollar. Brent crude surged to an intraday high of $115.3 a barrel on Monday after Iran stepped up attacks on the UAE and ships in the Gulf, including several in the Strait of Hormuz.

While oil prices eased to about $113 on Tuesday on signs the U.S. Navy is loosening Iran’s grip over the strait, they remain elevated, underscoring persistent macroeconomic risks.

Higher crude prices are a negative for the world’s third-largest importer of the commodity, as they add to inflationary pressures and drag economic growth and corporate earnings.

“Fresh U.S.-Iran hostilities rattled sentiment, implying that the crude-led market gyrations will persist until clearer signs of a resolution to the conflict emerge,” said Anita Gandhi, head of institutional business at Arihant Capital Markets.

“While higher crude prices and a weakening rupee are fuelling record foreign outflows, the absence of any major negative surprises this earnings season is helping cushion the market against sharper losses,” Gandhi said.

On the day, half of the 16 major sectors logged losses. The broader small-caps and mid-caps rose 0.3% and 0.2%, respectively.

The top two stocks in the benchmark indexes by weightage, HDFC Bank and ICICI Bank, dropped 0.80% and 1.57%, respectively.

Mahindra & Mahindra gained 3.68% on beating quarterly profit expectations on strong SUV, tractor demand.

Larsen & Toubro, which has a significant exposure to the Middle East region, lost 0.63% ahead of its quarterly results later in the day.

Drugmaker Wockhardt jumped 8.77% after upbeat quarterly earnings.