Indian shares fell on Thursday, ahead of the expiry of derivatives contracts, as the rupee hit a record low and crude oil prices remained firm while lingering global trade war fears continued to hurt sentiment.
India imports about 80 percent of its crude oil needs and a weaker rupee and higher oil prices are expected to put pressure on the country's trade deficit which hit a four-month high in May driven mainly by a 50 percent surge in oil import bill.
Oil prices have been rallying for much of 2018 and Brent crude futures, the international benchmark for oil prices, were hovering around $77 per barrel as of 0647 GMT.
Meanwhile, worries over mounting global trade war fears kept markets across Asia jittery with the MSCI's broadest index of Asia-Pacific shares outside Japan trading 0.7 percent lower.
The broader NSE Nifty was down 0.41 percent at10,628 as of 0610 GMT while the benchmark BSE Sensex was trading 0.26 percent lower at 35,124.87.
"(We are) expecting expiry near 10,700. If you look at the second half of this (derivatives) series, macros have worsened a lot, be it the rupee or crude, which has impacted bullish sentiment," said Rahul Sharma, senior research analyst with Equity99, a Mumbai-based investment advisory firm.
The Indian rupee for the first time breached the 69 per dollar mark, tracking Asian peers hurt by weakening macro-economic fundamentals.
Titan Company Ltd and Tech Mahindra Ltd were trading more than 3 percent lower each, and were among the top percentage losers on the NSE index.
State-run lenders continued to be under heavy selling pressure with the Nifty PSU Bank index on track to post a fourth straight session of loss.
Indian Bank dropped as much as 4.3 percent after it withdrew dividend payment plan of 6 rupees per share.
Lakshmi Vilas Bank Ltd hit a three-week low following a report that the market regulator was seeking answers from the private lender for concealment of a dispute with Religare Finvest, a unit of Religare Enterprises Ltd.