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The rupee fell by 45 paise to close at 83.59 (provisional) against the US dollar on Tuesday as the ruling BJP is unlikely to amass an absolute majority in the Lok Sabha elections.
Besides, a massive sell-off in domestic stocks and a mighty dollar against major currencies abroad have deepened the gloom, forex traders said.
On the interbank currency market, the local unit opened weakly at 83.25 and fluctuated during the session between a high of 83.23 and a low of 83.59 against the dollar.
The domestic currency finally ended the session at 83.59 (provisional) against the dollar, registering a decline of 45 paise from its previous close.
On Monday, the rupee touched 83.14 against the US dollar.
“The rupee depreciated… today as domestic markets fell sharply amid uncertainty over the election outcome. This could also lead to some selling by foreign investors. The US dollar recovered from yesterday’s losses on a frail euro, which fell after disappointing employment data. The US dollar fell on Monday on weaker-than-expected ISM manufacturing PMI and construction spending,” said Anuj Choudhary – research analyst at Sharekhan by BNP Paribas.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.17 percent higher at 104.25.
Brent crude futures, the global crude oil benchmark, fell 1.88 percent to $76.89 a barrel.
On the domestic equity market, the 30-share BSE Sensex fell 4,389.73 points or 5.74 percent to close at 72,079.05. The broader NSE Nifty index fell 1,379.40 points or 5.93 percent to 21,884.50.
Foreign investors were net buyers of Indian equities on Monday, buying shares worth Rs 6,850.76 crore net. FIIs bought shares worth Rs 23,451.26 crore and sold shares worth Rs 16,600.50 crore in the cash segment.
