The rupee plunged 68 paise to 64.72 against the dollar on Monday after early trends suggested that the BJP and the Congress are neck and neck in Gujarat Assembly sweepstakes after one hour of counting of votes.
Besides, the American currency's strength against other currencies overseas weighed on the domestic unit, traders said. Meanwhile, US President Donald Trump's much-hyped tax cuts moved a step closer to reality.
The rupee had gained 30 paise to close at a fresh three-month high of 64.04 on Friday against the dollar after all exit polls had suggested that the BJP would retain Gujarat and return to power in Himachal Pradesh.
The Sensex tumbled 867.34 points, or 2.59 per cent, to 32,595.63 and Nifty slumped 258.45 points, or 2.50 per cent, to 10,074.80 in early trade.