Rising Crude, US Rate-Hike Bets Counter Dollar Inflow Support for Rupee

Rising Crude, US Rate-Hike Bets May Push Rupee to Record Low Good morning... I’m Pratigya Vajpayee in New Delhi, with your latest market update. It hasn’t been a good week so far for Indian assets. The benchmark Nifty 50 closed in the red for a second straight session on Tuesday, while the rupee is looking vulnerable again. A more than 20% jump in crude oil in two weeks has prompted analysts from Danske Bank and Ebury Partners to predict fresh lows for the rupee against the dollar. Shares of Indian firms such as Dr Reddy’s Laboratories, Sun Pharmaceutical and Cipla will be in focus today after US President Donald Trump announced plans for a 100% tariff on generic drugs from August 2028. In the metals space, higher copper prices are putting the spotlight on whether companies can pass on rising input costs (more on that below). Separately, the ongoing youth-led protests over education and unemployment rank among Prime Minister Narendra Modi’s biggest political challenges in recent years and increase the likelihood of a cabinet reshuffle, according to Bloomberg Economics. Amid all these concerns, the capital markets space is offering some positive cues. Mobile advertising company InMobi Pte has appointed four banks for an initial public offering over the next few months to raise about $1 billion, a potential boon for the listings space that has cooled this year. Meanwhile, a rally in chipmakers has pushed Asian stocks higher in early trading on Wednesday. In today’s newsletter, we cover: But first, let’s see why the rupee is struggling despite strong dollar inflows.