The rupee tumbled 45 paise to close at 83.59 (provisional) against the US dollar on Tuesday as the ruling BJP is unlikely to muster an absolute majority in the Lok Sabha elections.
Besides, a massive sell-off in domestic equities and a strong greenback against major currencies overseas added to the gloom, forex traders said.
At the interbank foreign exchange market, the local unit opened weak at 83.25 and oscillated between a high of 83.23 and a low of 83.59 against the greenback during the session.
The domestic currency finally closed at 83.59 (provisional) against the dollar, registering a fall of 45 paise from its previous close.
On Monday, the rupee closed at 83.14 against the US dollar.
“The rupee depreciated…today as domestic markets fell sharply amid uncertainty over election results outcome. This may have also led to some sell-off by foreign investors. The US dollar recovered from yesterday’s losses on the weak Euro, which fell on disappointing employment data. The US dollar fell on Monday on weaker than expected ISM manufacturing PMI and construction spending,” Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas, said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.17 per cent higher at 104.25.
Brent crude futures, the global oil benchmark, dropped 1.88 per cent to USD 76.89 per barrel.
On the domestic equity market, the 30-share BSE Sensex crashed 4,389.73 points, or 5.74 per cent, to close at 72,079.05. The broader NSE Nifty tumbled 1,379.40 points or 5.93 per cent to 21,884.50.
Foreign investors were net buyers of Indian equities on Monday as they purchased shares worth Rs 6,850.76 crore on a net basis. FIIs bought shares worth Rs 23,451.26 crore and sold equities worth Rs 16,600.50 crore in the cash segment.