MUMBAI - The Indian rupee snapped a four-day losing streak on Tuesday as the dollar eased and oil prices tumbled, but a report stating local bonds may not be considered for listing on a major global index this year capped gains.

The partially convertible rupee ended up just 0.05% at 81.58 per dollar, having touched a session high of 81.31. The currency had hit a record low of 81.6525 on Monday after declining for four straight days.

The rupee eased to a near record low and Indian bond yields rose after Reuters exclusively reported local government bonds will likely only be included in the JP Morgan emerging market global index early next year as New Delhi still needs to address various operational issues.

There had been a lot of optimism around India's likely inclusion as it would have brought inflows of around $30 billion and a decision was expected as early as this month.

"I think there's some hesitancy on India's side about bond index inclusion because it could bring in volatile flows," said Anitha Rangan, an economist with Equirus Group.

The rupee's sudden decline was worsened by the Indian central bank probably not supporting the currency as much as in the past few weeks, she added.

Broadly, risk sentiment seemed to be improving as Asian currencies made small gains, but worries about the dollar resuming its upsurge due to tighter monetary policy conditions lingered.

The dollar index eased 0.3% to 113.76 by 0956 GMT, backing off from two-decade highs. It had gained almost 4% starting last week on the back of hawkish Federal Reserve comments.

Meanwhile, crude prices hit a 9-month low overnight, having shed 12% this month alone, which bodes well for the rupee as India is a major oil importer.

(Reporting by Anushka Trivedi in Mumbai; Editing by Dhanya Ann Thoppil)