Oil Shock Deepens: Rupee, Growth, Earnings at Risk, Warns UBS

• UBS warns that the Indian Rupee, economic growth, and corporate earnings face significant risks as the global oil shock intensifies.
• The Rupee is under sustained depreciation pressure, with UBS maintaining a 95 view for the June quarter, citing current account deficit funding challenges amid weak FII and insufficient FDI inflows.
• India's GDP growth could moderate from 7% to 6.3% with $100 oil, and to 5.5% if crude sustains above $120, while inflation may rise above 5%.
• Earnings risks are building, with sector- and company-specific impacts expected, as higher oil prices pose asymmetric downside risks to global growth and inflation.
• While domestic liquidity offers some support, market direction remains news-flow driven, with global investors still cautious and underweight on India.