The rupee declined versus the US dollar on Wednesday, tracking a broad fall in domestic stocks and a spike in crude oil prices.
Persistent month-end demand for the dollar from importers also weighed on the rupee. Oil is India's biggest import item, accounting for more than 70% of the annual requirements.
At 1:49 pm (IST), the partially convertible Indian currency was trading at 53.40 per dollar after being as high as 53.03. It opened at 53.04 versus the previous close of 53.03.
The BSE Sensex was at 15,723, down 150 points over the previous close. It had earlier touched a day’s high of 15,887 and a day’s low of 15,666. It opened at 15,854.
The NSE Nifty was at 4,705, down 45 points over the previous close. It had earlier opened at a day’s high of 4,756 and hit a day’s low of 4,685.
Iran, which is facing the risk of further sanctions by the EU over its nuclear program, has threatened to cut off shipments through the Strait of Hormuz, a key shipping route for oil tankers.
At the same time, reports said that Saudi Arabia was ready to replace Iranian oil if supplies to Europe were halted.
Oil traded near the highest price in six weeks after Iran's threat after rising yesterday for a sixth day, the longest run of advances since November 2010.
The yen advanced against 14 of its 16 major rival currencies as investors sought safe havens amid downbeat outlook for the world economy going into 2012.
The Japanese currency gained as Asian stocks declined for a second day. Demand for the dollar was limited amid growing confidence about the health of the US economy.
The yen is up 4.3% against the dollar this year and 6.8% against the euro.
The euro common currency is down 2.4% against the dollar in 2011.
The dollar index, which tracks the greenback against six major currency rivals, was flat at 79.845 after a two-day drop.
