Reuters Market Eye - The Nifty falls 1.5 percent to test its 200 day moving average for the first time since April 16, after the rupee falls to a new record low of 58.92 to the U.S. dollar.
Rupee's continued weakness is stoking fears that foreign investors may pare positions and clouding expectations for a rate cut by the central bank at its monetary policy review on June 17, say dealers.
"Given the INR weakness is already causing a lot of pain to FIIs (foreign institutional investors), the chances of the Nifty falling further are far higher," said Jai Bala, chief market technician, Cashthechaos.com.
Technical analysts see important support for the Nifty between the 200-DMA at 5,791.5 and 5,765, or the 61.8 percent Fibonacci retracement of the move from 5,477 in April to 6,230 in May.
A breach below that support zone could lead to more falls.
(Reporting by Abhishek Vishnoi)
