The rupee depreciated 63 paise to 71.44 against the US dollar due to heavy capital outflows from the domestic equity market as exit polls have raised concerns over the ruling BJP winning the state elections.

Exit polls have predicted a photo-finish in the politically critical Madhya Pradesh, edge for the Congress in Chhattisgarh and a clean sweep for it in Rajasthan. Investors are scrutinising the exit poll results in five states - Rajasthan, Chhatisgarh, Madhya Pradesh, Telengana, Mizoram - for clues to how Modi's Bharatiya Janata Party will fare in a general election that must be called by May.

Strengthening of US dollar against some currencies overseas and increased demand for the US currency from importers also weighed on the rupee.

The rupee opened weak at 71.28 against the dollar and further dropped to 71.44. It hovered in a range of 71.44 and 71.23 before quoting at 71.38, down 56 paise at 4 pm local time. On Friday, the domestic currency had recuperated by 8 paise to close at 70.82 against the US dollar.

The S&P BSE Sensex crashed 713.53 points to 34,959.72 against the previous close of 35,673.25 and the Nifty50 plunged 205.25 points or 1.92 per cent to 10,488.45 against 10,693.70.

The rupee sentiment was also hit as crude oil prices rose after OPEC members and 10 other oil producing nations had agreed on Friday to cut the output by 1.2 million barrels a day to boost prices.

Oil prices rose on Monday, extending gains from Friday, when producer club OPEC and some non-affiliated producers agreed a supply cut of 1.2 million barrels per day (bpd) from January. International Brent crude oil futures were at $62.21 per barrel at 0218 GMT, up 54 cents, or 0.9 per cent, from their last close.

Meanwhile, foreign funds pulled out Rs 817.40 crore from the capital markets on a net basis, while domestic institutional investors bought shares worth Rs 242.56 crore on Friday, provisional data showed.

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