The S&P BSE Sensex slipped 305 points to end at 25,400 and the Nifty50 dropped 87 points at 7,783.
With US Fed increasing interest rates to 3%, equity money flows into emerging markets like India could be impacted in the medium term.
The Indian unit opened higher at 66.10 per dollar as against overnight level of 66.30 at the Interbank Foreign Exchange market and firmed up further to 66.04 on initial dollar selling.
The rupee has dropped by 60 paise or 0.89 per cent in the last three trading days.
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Traders say the outlook for the rupee has improved on the back of a sharp narrowing in the current account deficit after government and central bank emergency measures such as curbing gold imports.
In worldwide trade, the US dollar retreated from its recent multi-year highs to trade subdued against major rival currencies
United States is rich beyond dreams but at the same time swimming in debt, the latest figures released by the US Federal Reserve show.
"I probably wouldn't do much," Buffett said when asked what he would do if he ran the Fed.
Sustained dollar unwinding from exporters and banks amid weak overseas trend gave a boost to the rupee
Weakness in the dollar against some currencies supported the rupee.
The dollar index was down 0.01 per cent at 95.86 against a basket of six currencies in early trade
In the global market, dollar fell against most of its rivals on Monday.
Overseas, the US dollar hovered near a three-week low.
ONGC was the top gainer in the Sensex pack, rallying around 6 per cent, followed by IndusInd Bank, L&T, UltraTech Cement, Titan, SBI and NTPC. NSE Nifty settled 32.10 points up at 14,707.80.
The US FOMC concludes its two-day meeting today while the Bank of Japan will start its two-day meeting today.
The Federal Reserve must now ensure that higher inflation doesn't derail the US recovery.
The partially convertible rupee ended at 62.2825/2925 per dollar.
The Biden administration has proposed a massive hike in immigration fees, including the much sought-after H-1B visas for high-skilled foreign workers, which is very popular among Indian tech professionals. Under the proposed rule, published by the US Citizenship and Immigration Services (USCIS) on Wednesday, the application for the H-1B visa increases from $460 to $780, and L-1 from $460 to $1,385. The application fee for O-1 visas has been proposed to increase from $460 to $1,055.
The BSE IT sector, however, failed to snap a three-day losing streak and closed around 0.14 per cent lower.
The rupee fell to more than one-month low of 65.75 against the US dollar on Thursday.
Heavy selling of the US dollar by banks and exporters in the face of renewed capital inflows predominantly kept sentiment highly buoyant
The rupee is expected to become more jittery and choppy in the near-term
The rupee rose by 4 paise at 66.88 against the US dollar in early trade on Wednesday.
'India is not so distant from years of high and entrenched inflationary expectations that it should start trying to play games with the economy the way the West's central bankers think they are entitled to,' argues Mihir S Sharma.
The 30-share Sensex closed down 114 points at 28,622 and the 50-share Nifty ended down 37 points at 8,686.
When protests broke out after a police officer shot an unarmed teenager in Ferguson, Missouri in August, police in camouflage gear wielding assault rifles and stun grenades drove through the city in armored vehicles attempting to control the crowds. Several human rights activists criticised the use of force by the police. Some said they were brutal, some said their actions were justified. So, when can cops exert force on crowds? Here's a list of situations when cops can attack a crowd.
Silver also slipped below the Rs 41,000-mark by falling Rs 525 to Rs 40,975 per kg on reduced offtake by industrial units and coin makers
The rupee rose by 12 paise to close at 79.78 against the US dollar on Monday due to a weak dollar in overseas markets and an improved appetite for riskier assets. Stronger regional currencies also supported the rupee sentiment ahead of the US Fed policy decision on Wednesday. Weak domestic equities and FII outflows, however, capped sharp gains. At the inter-bank forex market, the local unit opened at 79.86 against the greenback and moved in a range of 79.70 to 79.87 in the day trade.
Silver coins remained steady at Rs 52,000.
Globally, gold fell 0.2 per cent to $1,162.25 an ounce in Singapore.
Silver also rose by Rs 100 to Rs 37,400 per kg.
The rupee had ended 5 paise lower at 67.49 on Monday.
The Congress is planning to call a meeting of Opposition parties in May. It is possible to keep all possibilities open in case Karnataka yields a hung House, leading to a recalibrated Opposition.
Increased selling of the US dollar by exporters supported the rupee.
Indian rupee is likely to test 76-76.50 levels as a relatively strong greenback, boiling crude prices and COVID headwinds deepen the depreciation bias for the domestic currency, according to experts. One of the significantly-hit Asian currency in recent months amid uncertain economic times, rupee is expected to see a consolidation in the vicinity of the current level before being pulled towards the depreciation bias. While the equity market has been surging with occasional blips, the rupee has mostly been weak against the US dollar in recent months.
The rupee appreciated by 37 paise to 62.12 against the dollar in early trade on Monday.
Gold drifted lower by Rs 200 to trade at one-week low of Rs 31,050 per ten grams.
'One way of doing this could be offering credit guarantee to the banks, say 10 per cent, for fresh loans given to micro, small and medium enterprises,' observes Tamal Bandyopadhyay.
Silver also rose 0.8 per cent to $16.63 an ounce.
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