Rupee plunges 45 paise to close at 83.59 against US dollar on election result day

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.

• Also read: Sensex, Nifty plummet after election upset; investors brace for policy shifts

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.

Counting of votes on Tuesday indicated disappointing results for the BJP-led NDA in the Lok Sabha elections, which appears to be losing heavily in its strongholds of Uttar Pradesh, Haryana and Rajasthan although it is expected to form the government with about 290 seats.

On its own, the Bharatiya Janata Party appeared to be falling below the majority mark with leads in 236 seats despite significant gains in Odisha, Telangana and Kerala, giving some solace to the party after the unexpected losses in the Hindi belt.

Its rival INDIA alliance was leading in about 230 seats. In the last elections, the BJP had 303 seats on its own, while the NDA had over 350.

"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 $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 ₹6,850.76 crore on a net basis. FIIs bought shares worth ₹23,451.26 crore and sold equities worth ₹16,600.50 crore in the cash segment.