Nifty erases July gains as rupee slumps

Reuters Market Eye - The Nifty falls to its lowest level since June 28 as the rupee slumps below the key psychological level of 60 per dollar on uncertainty about how long the RBI will keep its cash-tightening measures in place.

The Sensex is down 1.15 percent, while the Nifty falls 1.32 percent.

Lenders erase earlier gains to fall. Although at first investors reacted with relief the RBI kept interest rates and the cash reserve ratio on hold, the rupee's fall is creating uncertainty about the central bank's measures to defend the currency.

Yes Bank falls 3.81 percent, while Axis Bank 0.41 percent lower. The NSE banking sub-index is down more than 12 percent so far this month compared with a 1.5 percent fall in the broader NSE.

FIIs have so far pulled out 63.36 billion rupees from stocks so far this month, making July the second successive month of outflows by foreign investors, regulatory and stock exchange data shows.

Havells India is down 12.85 percent after April-June sales fell short of expectations on lower industrial demand.

(Reporting by Himank Sharma)