The Indian rupee slipped 8 paise to 95.78 against the US dollar in early trade on Wednesday, registering a fall from its previous close of 95.70, according to The Hindu BusinessLine. The domestic currency had opened at 95.60 per dollar and recovered 10 paise from Tuesday's close, but the weakness emerged as Brent crude remained well bid at $98 levels as risk aversion, geopolitical risk and war clouds in West Asia kept it higher. Forex traders said the escalating US-Iran conflict is again boosting safe-haven demand for the dollar, with the dollar index trading at 99.09, down 0.07 per cent. CR Forex Advisors MD Amit Pabari explained that "the rupee slipped after crude oil prices rebounded as hopes of an immediate US–Iran peace deal faded slightly. Reports of renewed US strikes on Iran and delays in negotiations kept markets cautious, even though investors still believe a broader resolution remains possible."
Indian equity markets opened with mixed performance on Wednesday, with the Sensex climbing 127.83 points to 76,137.53 and the Nifty 50 rising 36.45 points to 23,950.15 in early trade, according to latest market reports. The benchmark indices showed resilience despite ongoing regional tensions, with the majority of sectoral indices trading in green except oil & gas and banking. GIFT Nifty futures were trading at 23,890.5 at 7:59 am IST, indicating a muted start compared to Tuesday's Nifty 50 close of 23,913.7. The subdued opening reflects cautious sentiment amid regional tensions and global market volatility.
Tensions in the region remained high after Iran accused the US of violating a ceasefire by carrying out strikes near the Strait of Hormuz, potentially complicating efforts to end the three-month-long conflict, according to The Indian Express. Adding to concerns, Israel reportedly carried out more than 120 air strikes in Lebanon on Tuesday, one of the heaviest bombardments in recent weeks, according to Lebanese security sources. Indian shares also fell notably on Tuesday after American forces hit missile launch sites in Iran and boats trying to place mines, as reported by Business Standard, which has dented hopes of an imminent peace deal and contributed to the rupee's renewed weakness. Fresh US military strikes in southern Iran have weakened hopes of an immediate diplomatic resolution, reviving concerns around energy supply disruptions.
Brent crude fell 1.50 per cent to $98.09 per barrel in futures trade after reports that the US had carried out fresh attacks against Iran, offsetting hopes of a deal to reopen the Strait of Hormuz, according to The Hindu BusinessLine. The elevated crude oil prices continue to add pressure on the rupee and broader market sentiment, reflecting global energy market volatility and supply concerns. Asian markets traded higher, with Japan's Nikkei hitting a record high on AI optimism, as reported by market reports.
Market attention now shifts toward the upcoming RBI Monetary Policy Committee meeting scheduled for June 3-5, as reported by The Hindu BusinessLine. CR Forex Advisors MD Amit Pabari noted that "markets remain divided between a possible rate hike and a status quo decision. The larger question, however, is whether RBI may choose to prioritise currency stability alongside inflation management. With the central bank already using several measures to manage rupee volatility, interest rates could also become part of the broader strategy to attract inflows back into the system." Foreign institutional investors sold Indian equities worth ₹2,407.87 crore on Tuesday, according to exchange data reported by The Hindu BusinessLine. Overseas investors have now pulled out $24.2 billion from Indian markets so far this year, surpassing the previous annual record selloff seen in 2025.
