India’s stock futures and currency slid after a drone attack on Saudi Arabia’s oil facilities sent global crude prices soaring by the most on record.
SGX Nifty 50 index futures expiring in September fell 1 per cent as of 10:32 am in Singapore, while contracts on the S&P 500 and Dow Jones Industrial Average dropped 0.6 per cent. Brent crude rose as much as almost 20 per cent and West Texas Intermediate jumped more than 15 per cent after the worlds largest oil exporter lost about 5.7 million barrels per day of output on Saturday following the attack.
The rupee dropped in offshore markets, as traders bet the nations economy would be hurt by the surge in crude prices. India imports more than 80 per cent of its oil and around two-thirds of that comes from the Middle East. The dollar-rupee one-month non-deliverable forwards rose as much as 0.9 per cent, the most since Aug.14.
Current account deficit economies which are oil importers will fare worst, said Khoon Goh, the Singapore-based head of Asia research at Australia & New Zealand Banking Group. In this regard, INR, IDR and PHP are likely to underperform. USD/INR, after having fallen below 71 last week, is likely to test 72 again if oil prices stay elevated.