The Indian Rupee slumped against the US dollars on Tuesday as the Lok Sabha election results trend showed BJP to fall short of majority. Rupee weakened 38 paise to close at Rs 83.53 against the US dollar, after opening at Rs 83.38. The rupee had closed at Rs 83.14 on Monday.
Meanwhile, the dollar index dropped to 104.09, while US 10-year yields fell to 4.41%. The oil barrel prices also declined by over $2 per barrel, reaching multi-month lows. The drop in oil prices comes due to investor concerns over demand trajectory.
Sensex and Nifty witnessed deep cuts, closing at over 5% lower each.
Meanwhile, as per NDTV Profit, analysts expect market volatility to remain high in light of the election trends.
"Exporters are advised to take hedges at current levels of Rs 83.41 and importers are advised to take hedges below Rs 82.20 levels," Mecklai Financial wrote.
NDTV Profit also quoted Amit Pabar of CR Forex Advisors who concurred on the relationship between market volatility and election results.
"Well, what needs to be observed is whether the expected seats are secured by the ruling government to keep the euphoria alive. Anything less than expected can hurt sentiments in the short term and add pressure on the rupee," he wrote
Also watch: Lok Sabha Poll results: Sensex, Nifty tumbles 5% to log the worst session in over 4 years