BSE Sensex falls; rupee fall dashes rate cut hopes

Reuters Market Eye - The BSE Sensex and Nifty are down around 0.8 percent, after the rupee falls to a new record low of 58.64 to the U.S. Dollar.

Lenders fall as Rupee's continued weakness is stoking fears that foreign investors may pare positions, also clouding expectations for a rate cut by the central bank at its monetary policy review on June 17, dealers say.

ICICI Bank falls 3 percent, Axis Bank Ltd is down 1.6 percent, HDFC Bank Ltd is down 0.2 percent after RBI on Monday imposed penalties on them for violating guidelines related to details of customer identity.

Traders will await the factory output and wholesale price data due later in the week for direction ahead of the central bank's review next week.

However, IT stocks such as Infosys Ltd gain 0.6 percent, while Tata Consultancy Services Ltd is up 0.2 percent on hopes of better rupee earnings after further weakness in the currency.

(Reporting by Abhishek Vishnoi)