Mumbai: While most of Asia cheered the truce between the US and China, India’s rupee, bonds and stocks retreated amid the biggest surge in oil in two years, highlighting the nation’s vulnerability to spikes in energy costs.

The rupee was the only emerging-market Asian currency that weakened on Monday (December 3) as Brent prices rallied 6.2 per cent to $62.4 (Dh229) per barrel. Further gains might outweigh the rub-off effect of the trade war truce on oil-buying countries, including India, Indonesia and the Philippines.

“The Indian rupee stands to benefit less from this as India is not as reliant on exports, and the bounce in oil prices could also weigh on the currency,” said Khoon Goh, head of research at Australia & New Zealand Banking Group Ltd.

Asia’s third-largest economy imports about 80 per cent of its oil requirement, and the recent surge in crude prices was the key reason behind the rupee and Indonesia’s rupiah being the worst-performing currencies in the region. The rupee was never really impacted by the US-China trade war as the South Asian nation is not dependent on exports, said Sue Trinh, head of Asia FX strategy at Royal Bank of Canada.

India’s trade deficit is under structural pressures from rising electronics goods import and higher oil prices, she said.