The rupee fell over 0.5%, tracking higher crude oil prices and risk-off sentimentThe rupee fell over 0.5% against the US dollar early on Monday, tracking higher crude oil pricesand risk-off sentiment driven by the dramatic escalation in tensions in Europe.That suggests the energy-sensitive rupee wiped out its gains from Friday, driven by increased safe-haven bets as the Russian President ordered his nuclear forces to be on high alert and Western nations responded with fresh sanctions."Western sanctions on Russia were substantially enhanced over the weekend, leading to a risk-aversion sell-off in markets at the Asian open," noted Jeffrey Halley, a senior market analyst at OANDA,a leader in currency data.Crude oil prices jumped on fears that oil supplies from the world's second-largest producer could be disrupted."Crude remains supported by supply concerns as western sanctions are likely to impact Russian trade even though no direct restrictions are put on energy exports yet," said Ravindra Rao, Head Commodity Research at Kotak Securities.Tracking the surge in oil prices, the rupee tumbled over 0.5% to 75.73 per dollar in early trade on Monday from the close of 75.33 in the previous session.On Friday, the Indian currency had jumped nearly 0.5% after it suffered its worst session in more than 10 months the previous day.That increased volatility is likely to remain over the coming year.Enhanced Western sanctions on Russia in response to Mr Putin's most significant assault on a European state since World War Two for the fourth straight day has led to risk-aversion and caution.That increase in flight to safety bids boosted the US dollar and the yen.Domestic bourses, too, started the week in the red, with the BSE Sensex Index tanking over 1,000 points.The capital outflow has also not helped, with Foreign Institutional Investors (FIIs) being net sellers in the Indian capital market on Friday.
FIIs offloaded shares worth Rs 4,470.70 crore, as per data from the stock exchange.