Re down by 26 paise at 47.35/36 a dollar in morning trade

The Indian rupee today dropped by another 26 paise to a fresh five-year low of 47.35/36 against the greenback in morning trade due to sustained dollar demand amid a sharp slide in equity markets.

Stronger dollar overseas and consistent capital outflows from local equity also weighed on the rupee sentiment, Forex dealers said.

In quiet trade at the Interbank Foreign Exchange (forex) market, the domestic currency resumed sharply lower at 47.40/41 a dollar from its previous close of 47.09/10 a dollar but recovered modestly to 47.35/36 a dollar in late morning deals.

The rupee, however, witnessed relatively narrow movements in early trade.

Forex dealers said oil companies were sustained buyers in dollar amid unstoppable capital outflows from equity.

They said a plunge in Asian stocks and uncertainty in global markets also affected the rupee sentiment.

Asian indices including, Indian benchmark, Sensex were down by nearly three per cent in early trade today, raising fears of more capital outflows from the country.

The Sensex fell by over 406 points at 1015 hrs today on all-round selling by funds following weak Asian markets amid declining rupee.