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Gains in the dollar against major global currencies following surge in US jobs last month put pressure on the Indian unit, dealers said.
 
The rupee slipped below the 66-level by tumbling 74 paise, or 1.11 per cent, at 66.50 against the US dollar in early trade today on strong demand for the American currency from banks and importers.

 Gains in the dollar against major global currencies following surge in US jobs last month put pressure on the Indian unit, dealers said.

 Besides, a lower opening in domestic equity markets, weighed on the rupee, they added.

 The rupee had closed one paise lower at 65.76 against the US dollar at the Interbank Foreign Exchange on Friday.

 Meanwhile, the benchmark BSE Sensex dipped below the 26,000-mark by slumping 608.34 points, or 2.31 per cent, at 25,656.90 in early trade.

Sensex Sinks 600 Points as BJP Suffers Massive Loss in Bihar

The BSE Sensex slumped 600 points or over 2 per cent to slip below the psychological 26,000 mark for the first time since September 30, while the 50-share Nifty fell 180 points to 7,790 on Monday. The rupee also took a sharp hit, falling over 1 per cent to 66.50 per dollar in morning trade. (Read)

 Traders blamed the selloff to a massive defeat for the BJP in Bihar Assembly election, where the party could get only 58 out of 243 seats. The Nitish Kumar-led Grand Alliance won 178 seats.

 "Market expectations of Modi’s alliance winning in Bihar were tapering over the last few days and exit polls also pointed towards a tightly fought election - but a rout had not been expected," said market expert Ambareesh Baliga.

 Most analysts, however, said Monday’s sharp fall was a knee-jerk reaction and markets are likely to find a bottom soon.

 "Any correction in markets should be temporary and an opportunity to buy... We do not expect any change in direction or pace of reforms," said Prabhat Awasthi of Nomura.

 Sanjeev Prasad of Kotak Equities said, "Bihar elections results will not have impact on economic reforms... Market at reasonable valuations but require reform support."

 As of 09.25 a.m., all Nifty stocks traded in the red, but the benchmark Sensex and Nifty traded off day’s lows. The Sensex was down 467 points at 25,798, while the Nifty traded 142 points lower at 7,812.