Oil spike, risk off on Middle East flare up may drag Indian rupee past 86/USD
MUMBAI: The Indian rupee is expected to slip past 86 to the U.S. dollar at the open on Friday, hit by surging oil prices and sliding risk assets after Israel attacked targets in Iran.
The 1-month non-deliverable forward indicated a open in the 86.02 to 86.10 range, versus 85.60 in the previous session.
Brent crude soared 11%, U.S. equity futures plunged 1.8% and safe-haven demand boosted the struggling dollar.
'The real concern for the rupee isn't just today's oil spike - it's the risk of a sustained rally if Middle East tensions deepen,' a currency trader at a Mumbai-based bank said.
According to the trader, the 86.00 to 86.10 zone is a major support for the rupee, though he warned that defending it 'will be challenging'.
Indian rupee ends a tad lower, hurt by corporate dollar bids, outflows
Israel said it targeted Iran's nuclear facilities, ballistic missile factories and military commanders on Friday, warning that it marked the beginning of a sustained campaign aimed at preventing Tehran from building an atomic weapon.
Another report suggested that explosions were heard northeast of Iran's capital Tehran.
The strikes by Israel came amid mounting tensions over U.S. efforts to halt Iran's production of atomic bomb materials.
'Markets will carefully assess the risk of escalation,' DBS Research said in a note.
Safe-haven demand lifted the Japanese yen and the Swiss franc and helped the dollar index recover to the 98 handle. The 10-year U.S. yield dropped despite the jump in oil.
Brent crude is potentially headed for its biggest one-day rise in over three years.
Oil is a major component of India's import bill. A $10 barrel increase in crude can widen the current account deficit by up to 0.4% of GDP, economists estimate, and can add up to 35 basis points to headline consumer inflation.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Upturn
2 days ago
- Business Upturn
MRF shares fall nearly 1% amid crude oil price spike following Israel-Iran conflict
By Aditya Bhagchandani Published on June 13, 2025, 09:40 IST Shares of MRF Ltd slipped 0.51% to ₹1,35,690 in Friday's session as investors turned cautious amid a surge in global crude oil prices triggered by rising geopolitical tensions in the Middle East. The Israel-Iran conflict has pushed Brent crude prices above $77 per barrel, a rise of over 10%, raising concerns about higher input costs for tyre manufacturers like MRF. MRF, one of India's leading tyre makers, relies heavily on petroleum-based raw materials such as synthetic rubber and processing oils. A sharp increase in crude oil prices significantly impacts the company's production costs and operating margins. The stock movement is in line with broader weakness across sectors vulnerable to oil inflation, including aviation, paints, logistics, and chemicals. Analysts expect continued pressure on tyre stocks like CEAT and Apollo Tyres as well if oil prices remain elevated. Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Ahmedabad Plane Crash Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
Time of India
2 days ago
- Time of India
Friday the 13th jitters: Sensex tanks over 1,100 pts, Nifty slips below 24,700 as Israel-Iran tensions flare
Indian benchmark equity indices plunged in early trade on Friday, mirroring sharp losses in Asian markets after Israel launched military strikes on Iran, heightening geopolitical tensions in the oil-rich Middle East. At around 9:19 am, the BSE Sensex was down 1,163 points, or 1.42%, at 80,528, while the Nifty50 fell 284 points, or 1.13%, to 24,608. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Ballina: Waterproof Your Home [Discover] Waterproofing Services Learn More Undo Among sectors, Nifty Oil & Gas was the worst performer, falling 1.6%, dragged by losses in Mahanagar Gas, IGL, BPCL, and IOC. Meanwhile Nifty Bank, IT, Auto, Metal, and PSU Bank indices declined between 1% and 1.5%. In the broader market, the Nifty Midcap index slipped 1.1%, and the Nifty Smallcap100 dropped 1.5%. The market capitalisation of all listed companies on the BSE fell by Rs 5.52 lakh crore to Rs 444.06 lakh crore. Here are key reasons behind today's stock market crash Live Events 1) Israeli strike on Iran The selloff was triggered by Israel's military strike on Iran early Friday. Israel said it targeted nuclear facilities, missile factories, and top military commanders in a 'preemptive strike' to stop Tehran from developing nuclear weapons. A state of emergency was declared in Israel in anticipation of retaliatory missile and drone attacks. Iranian state media confirmed the death of Hossein Salami, Commander of Iran's Revolutionary Guards. Israeli officials also claimed that several senior Iranian military officials and nuclear scientists were likely killed. U.S. Secretary of State Marco Rubio called the strike a "unilateral action" by Israel and clarified that Washington was not involved. The attack comes amid stalled nuclear talks, with a sixth round of negotiations between the U.S. and Iran scheduled in Oman on Sunday. 2) Oil prices surge on supply fears Brent crude futures jumped $6.29, or 9.07%, to $75.65 a barrel by 03:15 GMT after touching an intraday high of $78.50 — the highest since January 27. U.S. West Texas Intermediate (WTI) crude climbed $6.43, or 9.45%, to $74.47 a barrel, after hitting $77.62, the highest since January 21. These were the sharpest intraday gains for both benchmarks since 2022, when Russia invaded Ukraine, leading to a spike in energy prices.
Business Recorder
2 days ago
- Business Recorder
Oil spike, risk off on Middle East flare up may drag Indian rupee past 86/USD
MUMBAI: The Indian rupee is expected to slip past 86 to the U.S. dollar at the open on Friday, hit by surging oil prices and sliding risk assets after Israel attacked targets in Iran. The 1-month non-deliverable forward indicated a open in the 86.02 to 86.10 range, versus 85.60 in the previous session. Brent crude soared 11%, U.S. equity futures plunged 1.8% and safe-haven demand boosted the struggling dollar. 'The real concern for the rupee isn't just today's oil spike - it's the risk of a sustained rally if Middle East tensions deepen,' a currency trader at a Mumbai-based bank said. According to the trader, the 86.00 to 86.10 zone is a major support for the rupee, though he warned that defending it 'will be challenging'. Indian rupee ends a tad lower, hurt by corporate dollar bids, outflows Israel said it targeted Iran's nuclear facilities, ballistic missile factories and military commanders on Friday, warning that it marked the beginning of a sustained campaign aimed at preventing Tehran from building an atomic weapon. Another report suggested that explosions were heard northeast of Iran's capital Tehran. The strikes by Israel came amid mounting tensions over U.S. efforts to halt Iran's production of atomic bomb materials. 'Markets will carefully assess the risk of escalation,' DBS Research said in a note. Safe-haven demand lifted the Japanese yen and the Swiss franc and helped the dollar index recover to the 98 handle. The 10-year U.S. yield dropped despite the jump in oil. Brent crude is potentially headed for its biggest one-day rise in over three years. Oil is a major component of India's import bill. A $10 barrel increase in crude can widen the current account deficit by up to 0.4% of GDP, economists estimate, and can add up to 35 basis points to headline consumer inflation.
