Indian shares fell on Tuesday while the rupee hit an 18-month low, as the spread of the Omicron coronavirus variant weighed on investor sentiment globally ahead of a series of central bank meetings this week, including by the U.S. Federal Reserve.
Fears grew about the Omicron variant after British Prime Minister Boris Johnson warned of a "tidal wave" of new cases, and the World Health Organization said it poses a "very high" global risk, with some evidence that it evades vaccine protection.
"The biggest concern that the markets have right now is the spread of the Omicron variant. A lot of information is still unknown," said Saurabh Jain, assistant vice president at SMC Securities in New Delhi.
The rupee was at 75.94 per dollar, its lowest since June 2020, pressured by continued outflows and monetary policy divergence between the Indian central bank and the U.S. Federal Reserve, analysts said.
The Fed is expected to signal a faster wind-down of asset purchases, while the European Central Bank, the Bank of England and the Bank of Japan are also meeting this week.
The Nifty bank index fell 0.9%, while the auto index dropped 1.1%.
Among individual stocks, Anand Rathi Wealth opened at a 9% premium in its Mumbai market debut. Drugmaker Lupin Ltd surged 6.2% after its Goa manufacturing plant got the establishment inspection report from the U.S. federal drug regulator.